Real-Time Applications Answer Need for Speed
For these companies, speed translates into the need to develop a new database of their customers' e-mail addresses, generate an e-mail or direct mail contact with a customer the same day the customer makes a purchase and produce a daily accounting of program response rates.
In short, retailers have two options: Make incremental improvements to existing processes using the data in their data warehouses and marketing databases, or adopt emerging best practices of leading retailers that are investing in technology-driven applications that can truly open up the opportunity for prompt customer communication.
Because new marketing technology has been developed with the need for speed in mind, business solutions that employ the ability to review individual customer point-of-sale transactions and develop and facilitate an appropriate follow-up communication in real time, near real time or even in daily batch processes are yielding the greatest results.
Prompt post-purchase contact enables higher response. By reviewing and acting on customer POS transactions as they occur, a select number of retailers are improving the effectiveness of their cross-shop triggers. Contacts that have frequently taken six to 10 weeks to reach a customer using older database trigger techniques have been reduced to a few days using direct mail -- or just hours using e-mail.
For example, The Sports Authority, a leading sporting goods retailer, used this technique when it ran a regional campaign to identify new and existing customers who shopped in its stores in early December. These customers subsequently were mailed an incentive to make additional purchases before Christmas. The net effect was a double-digit response rate among first-time and repeat purchasers.
Now that time can be used as an asset, retail marketers are quickly leveraging their technology to meet a number of goals: generating incentives to new customers to encourage them to return promptly for additional purchases, prompting existing customers to shop related brands or categories as their lifestyles and life stages change, and developing average customers into best customers by persuading them to become regular buyers in a new product category.
E-mail development and integration lowers costs still further. Many retailers also are feverishly building their Internet marketing programs by adding customers' e-mail addresses to their marketing databases and developing and delivering timely and relevant e-mail communications.
With integrated real-time or near real-time marketing programs, companies are forgoing e-mail address append tactics (and concerns). Instead, they contact customers through direct mail within days of a purchase and offer them an incentive to register at the company's Web site to receive periodic e-mail updates. With this approach, retailers reduce their acquisition and retention costs and ensure that only customers who have opted in to e-mail updates are contacted.
Once a customer has registered for e-mail updates, transaction triggers can be used within hours of a customer's purchase to generate timely and appropriate cross-shop and thank-you e-mail communications -- communications that once were executed solely through direct mail.
If these programs continue to show attractive results, it will provide these companies with a tremendous competitive advantage in their cost structure.
As market pressures push companies to merge their traditional and Web marketing groups, the cost savings achieved by transitioning traditional programs from direct mail to e-mail delivery will enable them to achieve the same reach on a smaller budget.
Prompt analysis allows midcampaign adjustments. Among all the new expedited marketing capabilities, retail marketers are most excited about the ability of new technology to provide response metrics from various direct response efforts on a daily basis.
By reviewing customer transactions each day and cross-referencing against a table of all of the customers who have been contacted, retailers are able to have an up-to-date view of their programs' success.
For marketers accustomed to receiving monthly updates weeks after the launch of a program, daily or even weekly updates provide them with data necessary to adjust marketing media and inventory within the execution of a program and to jump-start planning for the next program.
With these advances in technology and marketing capabilities, it is clear that the need for speed has been met. Now it's off to the races.