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Loyalty Marketing

Furniture World Magazine


Five secrets that get customers to return again and again, & tell their friends about your wonderful store and its services.

Are your furniture customers loyal to you? How would you feel if you could build a relationship with each and every customer and keep selling more furniture while cross selling accessories and other items?

Actually, if you have a list of your customers, you're already on the way to building one to one relationships... Here's How.

Retailers today are finding that in order to survive super discount competitors and huge conglomerate advertising blitzes, they must go back to the relationship building of the good old days. In cities and towns of yesteryear, the shopkeeper knew his customers by name and the type of merchandise they needed and made certain he had it in stock. This kind of relationship coupled with personalized customer service and a genuine empathy with customers, is what keeps them coming back to you instead of your competitors.

A mailing list of customers is the most valuable asset your business has. Yet only 10% of the retailers in the United States keep a current list of their customers! Statistics show that businesses spend five times as much for new customers than they do on their present customers, yet a regular customer is worth 10 times the cost of acquiring a new customer! Today, however, a mailing list is not enough. To build a relationship with a customer so they will recommend others to shop with you, you must gather information which is valuable to you. For example, age (ages of relatives), size of home, color and style preferences, date of last purchase, amount of purchase, brand preferences, important dates (birthdays, anniversaries).

Figure out..... ask customers what they really want. You will probably find that you can profit the most from a customer who buys high ticket items repetitively, rather than a one-time shopper. You can also profit from cross selling accessories with major purchases. Consider the Lifetime Value of the customer. If your customer, over a 5 year period bought a bedroom suite, dining room set, chairs and computer office center, how much money would that be worth to you? Then imagine, if that person recommended you to all her friends for all their furniture and accessory needs. It begins to add up, doesn't it? So it makes sense to capture the name of that customer who has the potential to generate thousands of dollars more to your bottom line!

Waiting on customers courteously in the store is just the beginning of good customer service. First, find out what the customer expects from you. Make sure your salespeople praise every customer, show an interest and establish a rapport. Get in the habit of corresponding with your customers. Send them notes, cards, articles and clippings that interest them. Send them thank you notes and cards telling them about private sales and showings.

Follow through after the sale. Ask yourself, " What will this do to help bring the customer back again."

Remember what Mr. Feargal Quinn says in his book, Crowning the Customer, "What gets measured, gets action. What isn't measured, gets ignored."

Michael L'Boeuf, Ph.D., author of How to Win Customers and Keep them for Life says his "Greatest Business Secret in the World" is: THE REWARDED CUSTOMER BUYS, MULTIPLIES AND COMES BACK."

A study by the Rockefeller Foundation found that a whopping 68% of customers stop buying from you because of an attitude of indifference toward the customer by the owner, manager or employee. In other words, if you ignore customers, 7 out of 10 will not shop with you again, for NO SPECIAL REASON!

By segmenting customers into groups, you can treat customers individually, based on their buying habits and the information you've gathered. New customers need to know that you value them as a NEW customer and that you actually care if they shop with you again. Send them a thank you note after their first purchase.

Since furniture store customers are infrequent and cyclical, you want to offer rewards to past customers between the times they might shop with you again. For example, if you have a list of young women age 17 and over, you might send a newsletter about furnishing a new home. Or offer free accessories if they recommend a friend for a decorating consultation. Start a Preferred Customer Club where the customer signs up to keep in touch with you from their first purchase through marriage and adulthood. You stay in touch by advising them at each stage, while showing your latest brands, accessories and specials... just because they are a "preferred customer."

Once you've built a list of customers, their preferences and demographics, you'll be able to use this important information to find new customers with similar characteristics. Start a Referral program by rewarding customers who refer their friends and relatives to your store. Obtain a list of new movers to your area with similar age and income parameters to your present customers. Use testimonials from satisfied customers to attract new customers by mail. Obtain a mailing list of families with young children or children 14-18 or adults 18-30 to promote furniture categories such as youth, bedroom, junior dining room, leather or home office.

The information you need to become more successful is right in your own backyard... your customer records. Dig in and harvest an acre of diamonds.

In an age of personalized communication, it makes sense to build a one to one relationship with each and every one of your customers. After rapid expansion caused years of financial reupholstering, a five store furniture chain in Tennessee used credit files and direct mail to crank up their marketing. Since this promotion had to be successful, they turned to a loyalty marketing technique to make their present and past customers feel special.

Using credit files and personalized letters, the furniture chain tapped in to their customers' available credit and found more than $21 million dollars in approved credit just "sitting" there.

The individually addressed letter asked customers to attend a private preview sale on a Wednesday night. The offer guaranteed the lowest prices of the year, free gifts and snacks. The real hook offered the exact amount of available pre-approved credit with no down payment, no interest and no payments for 6 months.

After inserting the letter inside a four color tabloid, provided by one of the retailer's manufacturers, they sent the mailer to 20,000 present and former customers including an additional 6428 prospects that matched customer profiles. The mailing cost the client $7,100. Customers not only spent $60,000 during the five hours of the preview sale, they continued to shop several days before and after to use up their credit balances. Net result ? Normal five-store sales for the week doubled from $500,000 to $995,000, a net increase of half a million dollars!

Once you have a sense of your customer's demographic profile, you can match that profile to localized mailing lists for prospecting. A furniture factory outlet chain in the Southeastern U.S. used this technique successfully with summer promotions.

Each of 10,000 letters per market were personalized and mailed in a plain white #10 window envelope with only the return address showing. Prospects were selected by age and income parameters appropriate to each market. Apartment dwellers were excluded and mostly suburban areas around each store were selected.

The letter invited the prospect to a "ONCE IN A LIFETIME" Opportunity to buy their furniture at the absolutely lowest price possible.

However, this special was good for One Day Only, from Noon until 9 p.m. in most markets. The hook was a large "SAVE UP TO 50% OFF" Plus 12 months same as Cash with approved Credit!

To further entice the reader, they were told that this sale was by invitation only and that they must bring the letter in to be admitted.

With postage, each of the 10,000 name mailings cost the client $4000. Store sales for the 9 hour sale averaged between $20,000 and $60,000 per store.

By following the 5 Secret Formula for increasing sales, both of these retailers now have an opportunity to build better relationships with these new and credit worthy clients and increase sales exponentially in the coming years.

Allan Katz is owner of Katz Innovation Resources, a consulting and service firm helping retailers nationwide capture, track and reward customers using loyalty marketing techniques. Mr. Katz is the author of The Complete Guide to Retail Loyalty Marketing, a 168 page guide on how to get more customers and keep them from being swallowed up by your competitors, upon which this article is based.