Road Runner aims for better fitting DM strategy
After encountering difficulties finding a circulation manager and a marketer who could integrate its online and offline strategies, Road Runner Sports made the decision last year to outsource its direct marketing strategy. As a result, its response rates are up despite its decreased prospecting.
As the operator of the world's largest running footwear store chain and a successful direct marketing business for 24 years, Road Runner considers itself an expert in both running and direct marketing. However, the multichannel retailer increasingly felt pressure from category leaders like Foot Locker.
"We found we just weren't as smart as we should be in our contact strategy," said Danae Brooker, director of marketing at Road Runner, San Diego.
Road Runner then decided to collaborate with direct marketing consultancy Marketsmith Inc. to make Road Runner's catalog business as profitable as it could be.
The partnership, begun in September, has led to a redesigned catalog, a new brand initiative guaranteeing customers the perfect fitting running shoe and dividing Road Runner's audience into persona-based segments.
Marketsmith and its client determined that while Road Runner's catalog did a good job with heavy runners, it could be intimidating for less-frequent runners and difficult to navigate for first-timers.
As a result, starting with the fall catalog, shoes are separated by category to make it easier to shop.
In addition, the merchandise mix was updated with more apparel and accessories that can be used for running or working out in order to appeal to a younger consumer and women. Since the catalog's shoppers currently skew slightly towards men, these are two groups Road Runner would like to attract.
"The growth in the running space is around the female runner," Ms. Brooker said. "We want to keep up with that by offering the right experience, product [and] look and feel without turning off the male customer."
The book's imagery is focused on inspiration and aspiration around running whereas previously it was more functional.
"We're getting good feedback about this, especially from our female customers," Ms. Brooker said.
Road Runner is also sending out different versions of the catalog based on whether recipients are promotionally sensitive or brand loyal.
For example, one version might offer free shipping and 10 percent off all purchases to anyone who signs up for Road Runner's paid loyalty program, while another promotes a free Ultimate Running Guide CD with any purchase.
In the future, Road Runner would like produce a more customized catalog with up to nine different versions that would offer customers specific products based on their purchase history.
The versioned catalogs would employ images that are more appropriate for each target audience. For example, the catalog cover might feature a race for more frequent runners and a lifestyle image for people who aren't runners.
What's holding Road Runner back from employing this strategy right now is simply the fact that its audience is still mostly made up of heavy runners, Ms. Brooker said. But the company expects its audience will broaden as a result of the new ploys in place.
Another key strategy the company has adopted is to mail less frequently to people who aren't responding at a certain rate.
"We're doing a better job of segmenting our customer database," Ms. Brooker said.
However, the amount of mail sent to the house file is actually increasing while the amount of prospecting is decreasing.
"The Road Runner customers are loyal: [Road Runner] didn't need to be as reliant on prospecting as they were," said Monica C. Smith, president/CEO of Marketsmith, Morristown, NJ.
As a result of the new catalog design and the new contact strategy, Road Runner claims to have seen an increase in response rates, Ms. Brooker said.
Road Runner has also learned that it can use the catalog to drive in-store purchases. The company is using this information as part of its retail marketing strategy.
Another new initiative from Road Runner is its Perfect Fit Guarantee that offers customers a 60-day exchange on any pair of shoes purchased from Road Runner if they don't end up being a good fit. The guarantee is being used as a key message in the catalog, on the Web site at www.roadrunnersports.com and in-store.
Road Runner also recently changed its corporate tagline from "The World's Largest Running Store" to "Your Perfect Fit Guarantee."
This month, Road Runner will e-mail its customers an online video that describes what it does to get people into the right pair of shoes. This includes a running analysis center in its stores, a Perfect Fit Finder tool on the Web site and thoroughly trained specialists at its call center.
Ms. Smith said she is expecting Road Runner to start experiencing double-digit increases in response rates once the persona-based marketing really kicks in.
"Because variable-data printing has become so advanced and data-mining is so easy, we can marry them together and start to create images and tones of voice that really speak to an individual household," she said.