Retailer's Response Rates Head North With Prerecords

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Canadian clothing retailer Northern Group Retail Ltd. is using prerecorded message campaigns in conjunction with its loyalty program, adding an element to its marketing mix that has boosted response rates.


Northern Group, Mississauga, Ontario, is seeing a lift in response rates for standalone calls compared with test control groups that did not get calls. This is in line with industry averages for this channel, ranging from 5 percent to 20 percent in incremental lift on average response rates.


The lift in response rates on prerecorded messages used with direct mailers compared with direct mail alone generally ranged from 5 percent to 20 percent and went as high as 38 percent.


Response rates have varied considerably by campaign and offer, with some campaigns succeeding and others falling flat. ROI assessments have found positive returns on campaigns overall.


Northern Group has been a client of SmartReply, Irvine, CA, for about a year and a half. The retailer hired SmartReply to revamp the telemarketing it conducted as part of its Northern Friends loyalty program.


"Direct mail can get you so far," said Ryan Brown, director of marketing for Northern Group. "This was an opportunity to get in on an early adoption phase of a new technology that allows you to stand out."


Northern Group operates 270 stores in Canada and is launching eight stores in the northeastern United States. It promotes two brands: Northern Reflections, a clothing line for women ages 35-55, which it is preparing to rebrand in the fall; and Northern Getaway, a specialty line for boys and girls ages 7-8.


Prior to the introduction of SmartReply, Northern Group relied on in-store personnel, such as salespeople at retail counters, to call customers in the Northern Friends program to alert them to upcoming sales and promotions.


Prerecorded messages let Northern Group send a consistent message in its telemarketing, Brown said. When using in-store employees for telemarketing, the company had a difficult time presenting the same script to each customer and monitoring the people making the calls.


Tracking response rates also was tough, Brown recalled. In contrast, SmartReply gives Northern Group daily updates on the results of its prerecorded messages.


The Northern Friends database contains more than 1 million customer records. It lets Northern Group track which customers received calls and which subsequently made a purchase at a retail location, enabling it to generate response statistics.


Northern Group had concerns about customer privacy when it began the prerecorded messages, Brown said. To ensure it developed the right legal framework, Northern Group and SmartReply worked with the Canadian Radio-television and Telecommunications Commission, which oversees telemarketing regulations in Canada.


The company weighed opt-in and opt-out options, Brown said. Northern Group decided to let customers who receive the prerecorded calls opt out of future calls by pressing a button on their telephone keypad.


Northern Group aims to deliver the messages to answering machines. In cases of live answers, customers hear a message informing them that the call is recorded before getting a marketing message.


Northern Group uses prerecorded calls to alert customers of sales or in-store events, for exclusive offers and as an advance for direct mailers. However, Brown said he foresees using the technology to respond to outside factors that could increase sales.


For example, if a snowstorm strikes in western Canada, Northern Group headquarters in Ontario could rapidly deploy a prerecorded message campaign to Northern Friends members promoting outerwear, Brown said.


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