March 1998



Time to change the buzzwords to focus on relationships

The man who says he invented the expression "direct marketing" 35 years ago would like to erase it from the retailing lexicon. He wants to replace it with "relationship marketing," which carries none of the junk mail, hard-sell deal-with-a-call-while-eating-dinner connotations of the older term, he says. More importantly, it expresses much better the '90s ideal of encouraging un-swerving loyalty in customers - a necessity in today's hypercompetitive retail environment, he says.

Lester Wunderman, chairman of Wunderman Cato Johnson, a unit of Young & Rubicam, made the point during a meeting in Great Britain of the - pardon the expression - Direct Marketing Association. The Financial Times of London covered his speech.

One reason Wunderman is such a champion of relationship-building: repeat business, he says, accounts for 90% of the average company's profits. And contrary to popular belief, he maintains, most customers are happy to provide the personal information that relationship-marketing requires. As long as inquiries about income or lifestyle result in better service, consumers don't see them as prying.

"At its purest, one-to-one or relationship marketing is about offering people individual solutions to their problems and listening to what they need, rather than telling them what they must buy," Wunderman says.

He criticized superstores, which seem to be begging their customers for divorces. Nothing is worse, he says, than "a megastore that displays 50,000 items and expects consumers to shop the entire store to find the relatively few items on their shopping list."

Another point Wunderman makes: marketers will win loyal customers only if they stress the services and benefits their products provide - not just the products themselves. "People want the ability to communicate more than they want phones and faxes," he says. (He'd no doubt argue they also want to feel beautiful, rich or loved more than they want diamonds and gold.)

Some Key Points

If you want to be a pro at relationship marketing, a computer database can help. But learning to build and use a database can be an exercise in frustration. The following tips come from Susan Eisen, owner of Susan Eisen Fine Jewelry, El Paso, TX. Eisen started database marketing in 1985 and has, she admits, learned most of these lessons the hard way. Here's what she recommends:

  • Be diligent in collecting your data. Every name should be accompanied not just by addresses and phone numbers (home and business) but by spouse's name, birthday, wedding anniversary, e-mail addresses, details of purchases and tastes in jewelry. As soon as a sales associate learns any pertinent information about a customer, he or she must write it down and put it in the data-entry bin to be inserted in the database. Each sale must be entered.
  • Train associates to write down visual clues as to customers' preferences and spending habits. Do they wear a lot of designer items? Do they have a strong preference for emeralds? This information, entered in the database, will help you direct your marketing efforts.
  • Assign data entry to one person, someone with good spelling and typing skills. Entries should be consistent and correct. Misspelling a customer's name on a direct mail piece is like telling him or her to shop elsewhere.
  • Scour local newspapers and other publications for names to add to your database. People who've gotten big promotions or been named partner in a law firm are good targets for mailings. If you have time, write a letter of congratulations. This will put you on their radar screen.
  • Avoid duplicate entries. Each one can cost $30 to $50 per year.
  • Put your personal stamp on your mailings. A label or sticker with your motto or other identifying symbol makes your mail pieces look individualized, not mass-produced.
  • Use transparent labels. They make the addresses appear to have been typed rather than spewed out of a printer by the thousands.
  • Aim your mailings at the appropriate customers. If you're holding a colored stone event, don't invite customers who like only diamonds. If an avant-garde designer is making a personal appearance, don't invite people whose taste runs to filigree and Victoriana.
  • Vary your mailings by ZIP code. You can't mail to everyone on your list (Eisen has about 12,000 names in her database) so you need to rotate them. Selection by ZIP code is an efficient method of doing this.
  • Track the results of your efforts. Ask customers how they heard of a particular offer or event so you can tell what pulled them in.
  • The most important advice: don't think database marketing is cheap, easy or quick to bear fruit. The hardware, software and mailings are all expensive. So is the manpower needed to accumulate data and keep it up to date. But if you're in the business for the long-run, Eisen says, it's well worth the pain.

Copyright © 1998 by Bond Communications.


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