Customer Database: A Valuable Possession
Retail is a highly competitive business. Traffic to the store is one of the primary sources of business. Most leads are generated through walk-ins – either from passer-bys, advertisements or from referrals. Typically, food businesses thrive thanks to referrals.
Whenever a colleague or associate plans a lunch treat for us, often enough, they already have a restaurant in mind. As a restaurateur, the one million question is how can we stay in people’s mind so they will remember our eatery as THE right place to dine.
A prominently-placed advertisement shows up in the newspapers one day. Obviously, not everyone would be attracted to the ad, prompting the question, “how can retailers get to the top of the mind of shoppers” so they would not leave empty-handed whenever they visit an outlet or even if they do, they are likely to return in the near future to make a purchase.
Many retailers make the mistake of failing to apply this one very powerful strategy – they fail to collect personal details of their visitors or customer for their database.
Grave mistake. Everyone who walks to our store is a potential buyer. Something must have attracted them to walk in. A lady shopper may like our coffee mug but it may be too pricey to her budget at that particular moment. So she puts her buying decision on hold.
Retailers have to remember that people buy on emotions and back their decision with logic. In the context of the lady shopper, she may have the desire to come back but may not remember this anymore upon leaving the store due to her many commitments.
As such, if we keep details of this shopper in our database and put her in our mailing list where we can periodically but consistently mail her our new arrivals via e-mail, postcards, SMS or newsletters, then we would have “entered her world”.
From a privacy perspective, some of my seminar participants wondered if by so doing, we are spamming or intruding the life of our perceived potential customers. Frankly, I do not think so as these people have voluntarily divulged their personal details upon our request.
Restaurateurs, for one, can effectively tap database of their patrons to woo birthday diners, keep tabs of their patrons’ spending power or their likes and dislikes. How often do people eat out alone during their birthdays? Almost zero, unless they are real loners without family members or friends by their side. Hence, a simple strategy would be to SMS a birthday greeting to the person and tell him or her: “Birthday girls and boys get to eat, drink for free at our outlet”. This strategy may work wonder because the birthday boy/girl will bring a company of friends along.
How about “walk in with two friends at between 12.05 pm and 12.15 pm and enjoy one free banana boat!” Food operators can explore this strategy at a very low SMS cost “only” if they keep a database of their patrons. Compared to flyers, SMS is definitely cheaper, faster and has become an increasingly preferred communication medium to convey news on product promotion.
On the costing front, retailers would want to ask if they would be making less by dishing out free meals to their “birthday boy/girl”. To answer this question, we have to first understand customer acquisition cost. Let us imagine that an ad for our nice little imported steak costs RM1,000, 20 dinners came for a meal as a result of that ad and their average spending was RM100 each.
This means the ad campaign chalked up sales of RM2,000 and the owner makes a profit of RM1,000 after deducting the ad cost. But supposedly the birthday boy/girl (who gets to enjoy a free meal) brings in five friends, then the ad campaign would have attracted four additional patrons, thus pushing the profit up by 40 per cent to RM1,400. This is simple mathematics although in reality there are a few other variables, which I am unable to cover here.
Genting Highlands Resort is a master in utilising this strategy. Is today your birthday? A free room awaits you. Like the restaurant example, who in their right frame of mine would stay in Genting alone during their birthday or any other memorable occasion? The birthday boy/girl is likely to bring four, five or more guests along.
So next time, when someone calls up for promotion enquiries, ask these questions: How did you get to know us? May I know who is on the line? Can we have your cell phone number? Would you like to receive news on our product/service update? What is your e-mail address?
Sales Ninja Grandmaster
Hanzo Ng is Sales Ninja Grandmaster, lingo for Chief Trainer of Sales Ninja Training, Asia’s #1 Unconventional Sales Training. Sales Ninja Training specializes in helping small-medium, listed and global companies transform their sales people into the ultimate sales professional known as Sales Ninja. For more information on our sales, motivation and leadership trainings, visit our website.
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