GNC Pumps Up Marketing

GNC Corp. has driven store traffic and increased sales this year after instituting a database marketing solution in late 2005 to try to move from an SKU focus to segmented, customer-centric marketing.

GNC, Pittsburgh, is the largest global specialty retailer of nutritional supplements, which include vitamins, minerals, herbal supplements, sports nutrition products and diet and energy products. GNC has 5,800 retail locations in 47 countries and also sells products through

Database services giant Harte-Hanks, Billerica, MA, installed a customer-focused Allink solution for GNC. The company was working previously with Harte-Hanks, but on a smaller scale.

“Knowing your CRM goals and truly understanding CRM in your business is always the first step,” said Steven Nelson, GNC vice president of marketing. “With a deep understanding of our business model and a successful track record from our initial engagement, it made sense to extend our relationship with Harte-Hanks.”

Allink is basically a marketing data mart for GNC, said Bob Lord, Harte-Hanks vice president, group account director, account services. The data mart includes customer information about GNC Gold Card members (the company’s online and offline loyalty card program) and information gathered from customers at point of sale. The company’s Web site, which launched at the end of December, also feeds the data warehouse. The data warehouse is updated weekly.

Harte-Hanks has helped GNC capture, analyze and disseminate customer and prospect data across all points of contact. The company now knows, for example, which customers are buying and from what category so that it can optimize every interaction for increased sales and loyalty.

Previously, GNC “was really focused on products, so they were looking at how the products were sold,” Mr. Lord said. “Now they are focusing on the customer. As opposed to focusing on what SKU somebody purchased, they are focusing on what category someone purchased in and what [is] the next logical product they should cross-sell and upsell to that segment.”

Michele Fitzpatrick, Harte-Hanks chief marketing officer, added: “The consolidated view of the customer gave GNC the ability to do deeper analytics, build some models and to be able to move the marketing process from one size fits all to very tightly defined segment-based communications.”

Allink helps GNC segment customers, associate offers with target segments and plan and measure its dialogue-driven multichannel campaigns.

GNC mails 50 million to 55 million pieces of direct mail yearly, Mr. Nelson said. And customers who have valid e-mail addresses are e-mailed about four times monthly.

A key component of the Allink database is its focus on data quality. By verifying, correcting and enhancing multichannel contact information through its use of Harte-Hanks Advanced Data Quality (which is part of the solution), GNC has nearly eliminated undeliverable mail, improved data integrity and reduced costs.

GNC attributes increased store traffic and sales in part to Allink.

“GNC is experiencing strong performance and sales acceleration in all major categories,” Mr. Nelson said. “Our first-quarter 2006 net income increased by more than 300 percent, and our same-store sales increased at the strongest rate in many years.”

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