Speaking of Business: Retailers can take steps to boost holiday sales

Q: The holiday season is almost here, and it appears it will be a tight one. I own two small retail stores, and I’m trying to be proactive rather than reactive. I don’t want to spend my bundle only to waste it on marketing. What are some of the most cost-effective marketing techniques I should be using?

A: Most retailers don’t completely use their most-valuable marketing tool — their customer database. Assuming you provide a good service and sell a good product, your customers are the most apt to respond to your marketing message. Studies have shown only 58 percent of business owners use their customer database to build repeat business. I believe retailers need to develop loyalty-marketing programs to ensure high frequency of repeat business and a high response to your marketing message. Your program should include these ingredients:

Friendship

Building friendships is the best way to build loyal customers. Do this by building on your corporate brand, your image. You must recognize the need to be a unique retailer. For example, you may offer financial incentives to your most-loyal customers, but to be unique, you must go a step further. Focus on learning from each purchase, customizing customer communications and strengthening the bond between your customer and the store.

Information

Use shopper data to improve the mix and anticipate customers’ needs.

Good information will help bring you closer to understanding the values important to your customers. Thus, you can deliver the appropriate benefits to keep your customers loyal to your stores.

Remember, customers are different. Just because a shopper may shop for the same item at the same time as another doesn’t mean they are shopping for the same reasons.

Interaction

Interact with your customers.

Customize customer perks, and adjust some price points for your key customers to move them to use the program. Once they do, you can dig deeper into the database (i.e., analyzing every single customer).

Personalization

Personalizing customers’ shopping experiences can really pay off. If you know who they are and what they buy — you should send out some direct mail pieces giving your customers some suggestions as to what to buy this season.

Privacy

Privacy issues surrounding loyalty programs can backfire on retailers.

Privacy is a hot point with most consumers. You should take great care in protecting data regarding your customers.

Respect

A sense of community and mutual respect generates loyalty and helps brand a retailer.

Starting a program is a brick-by-brick effort. You have to set benchmarks. Proper execution of the program is vital to building a strong foundation. You can’t expect the whole structure to go up in a day. This is an investment for the long haul. You have to consistently demonstrate your customer commitment over time for the customer to commit to you.

The following are some key points you should keep in mind when building your program:

” Make your first impression count.

Make the value proposition clear in all your marketing material. Make the call to action clear and have a tie-in with your in-store signage. Recognize new visitors, and offer them a small tour. Exceed expectations on the first visit.

” Make it simple to solve problems.

Provide a customer-centered organizational architecture. Eliminate store clutter. Make finding products easy and buying them quick and efficient by having great employees.

” Design for your best customers.

Design your store for your most-valuable customers, not your average customers. Make customers feel valued and privileged. Master a “voice and image” that appeals to your customers.

” Create value and trust.

All stores are about two things: getting something of value, and getting it from someone you trust. Create added value through products and interactivity. Prove you can be trusted by delivering on your privacy promise. Don’t just say you care about customers, demonstrate it.

” Seize every opportunity to build community.

Use partners to enhance community. Use e-mails and the Web to drive community.

” Deliver all parts of the sales cycle or subject covered.

Provide more than just the information on your products. Demonstrate them. Create an expert knowledge base in your products. Provide comparison points for shopping. Make it easy to buy and return goods. Sell auxiliary or peripheral items that complete the experience/product.

” Provide the best, affordable service.

Make service easily accessible. Anticipate customer problems or needs. Provide the tools so customers can help themselves. Make return policies easy to use.

” Create an opportunity cost for defection.

Offer personalization that gets smarter with use. Offer points and unique rewards. Deliver on a value point better than all your competitors.

Greeley resident Russell Disberger is a founding member of Tekquity Ventures LLC, a Louisville-based specialty venture-capital firm. He can be reached at (970) 396-7009 or by e-mail at disberger@home.com. His Web site is at www.tekquity.com.

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