Cataloger, Retailer Get Help Targeting Prospective PurchasersAfter being acquired by HC Holdings, Columbus, OH, cataloger Huntington Clothiers, also of Columbus, and retailer The Custom Shop, New York, began looking for more effective ways to market to their customer files and prospective customer bases.
Database development provider Dynamic Marketing Services, the Houston office of KnowledgeBase Marketing, stepped in to help create a profile of both customer files. KnowledgeBase, which has done Huntington's data processing and management for the last five years, realized that enhanced database management would be beneficial to both companies.
To develop a more distinct profile of customers, it first needed a complete listing of both. To do this, KnowledgeBase used its customer enhancement file and acquisition tool to look at lists and indicate what customers are located closest to The Custom Shop's 60 retail stores across the country and which of those people has the greatest propensity to make purchases.
"We were never able to use this technology for Huntington before because they weren't a retail chain," said John Roberson, senior vice president of sales and marketing at KnowledgeBase. "Based on the analysis and modeling we did from the enhancement file for Custom Shop, we were able to identify who exactly had the proximity and propensity to act like a best customer."
Michael Stern, chairman of HC Holdings and CEO of Huntington, said he found the information to be very revealing.
"We plan on using the information. So far, we haven't based any future mailings on it," he said. "They did good work and have helped us to pinpoint our target customer."
Roberson said customer profiling can cost thousands of dollars. If a company wants to retain the information and use it on a regular basis, it will be charged on a per-1,000-name basis.
Huntington and The Custom Shop aren't the first clothing retailers to use this type of profiling. Roberson said he has noticed a trend developing with a number of retail chains he works with.
"The people sitting in the corner offices are putting pressure on the retail marketing departments to show them that there has been a positive return on their marketing investments," he said. "Because of that, many retailers have begun to focus more on trying to run more targeted promotions."
According to Roberson, retail chains can benefit in many ways if they decide to retain the information they acquire through customer profiling. It allows a company to maintain a better relationship with its customers and lets companies test things more effectively and more readily.
"This process also gives them the chance to track and measure responses as well as their return on investment," he said. "It provides people with more insight about their business."
And lastly, Roberson said, a key benefit is that it can all be done in stealth -- hidden from the competition.
"In the old days, when one company made a special offer to its customers or the general public, other companies would have the opportunity to make an offer for a better sale shortly thereafter," he said. "Now you can contact your customers or prospective customers directly through the mail or e-mail and the competition has no way of knowing."