If you’re looking to increase sales, send your customers a friendly postcard. It’s not a new tactic, but with a few new twists it has produced millions upon millions of dollars in sales for Coco, a luxury women’s clothing store in Nashville, Tennessee.
By leveraging her extensive customer purchase history to personalize cards to each shopper’s preferences, Coco has taken the art of one-to-one marketing to a new level, doubling her annual revenue along the way.
“The whole idea that as a small retailer we can finally deliver a series of ads to different people, based on preferences that they’ve told us, has been a goal of mine for over 20 years,” says the CEO. David Cook, who founded Coco in 1977.
In fact, according to Peppers and Rogers Group, an independent one-to-one marketing and consulting firm in Stamford, Conn., Cook’s banner ads are an example of a growing trend among businesses large and small: personalized advertising for individual customers. The benefits can be obtained using many approaches: emails and printed materials, including brochures and magazines.
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From a 5,000-square-foot, two-level boutique in the heart of Nashville’s upscale Belle Meade area, Coco sells designer clothing from the likes of Anne Klein, Dana Buchman, Tomatsu and DKNY, with prices and selection similar to Saks Fifth Avenue and Neiman Marcus. Cook spends at least a quarter of her time working with technology to collect sales data, handle billing and organize postcard campaigns.
“The mad scientist part of my personality is an Oracle database programmer, so we keep track of everything,” says Cook, who was an early adopter of computers. He bought the first system from him in 1978 and taught himself computer programming. In fact, since the early 1990s, Coco has saved every bit of marketing intelligence, including what each of his 25,000 customers bought, how much they spent, whether they paid full price or only sold to the database. Over time, Cook has determined that his top customers buy at full price (70 to 100 cents on the dollar), shelling out an average of $850 per purchase. Some customers shop on sale, while others reserve their purchases for major events.
In 1995, Coco began her personalized approach with a three-pronged plan. The key, Cook says, is having a wealth of customer purchase histories to draw on, a visual branding strategy, and the ability to personalize smaller banner ads at home using desktop printers and preformed cardstock.
Says Cook: “I can tell my database, ‘Give me a list of full price buyers who live within 50 miles who like Tahari and Dana Buchman (designs).’ those customers who spend on those two brands. Customers who tend to shop only on sale get a different card as do full-price shoppers who tend to shop when new merchandise arrives.
Cook uses his word processor’s mail merge function to match buyers’ names with merchandise preferences from the database. Cards sent to high-end clients are printed in color. Black and white cards go to customers who spend less or shop at sale events.
When recipients open the mailbox, they instantly know the card is from Coco. That’s because each Coco ad sports an elegant, family-friendly style using high-end fashion photography. And, a personalized message on the back addresses of your clothing purchases. After being greeted by name, recipients receive a handful of their favorite brands, based on previous purchases. To top it off, each card is hand-signed by the customer’s sales representative and stamped with regular postage, as opposed to the bulk rate, for an even more personal touch.
Before Coco started sending personalized cards, her traditional postcard campaigns saw a 2 to 5 percent response rate. Today, their personalized mailings typically drive 10 to 12 percent of recipients to shop at the team’s only store.
Coco banner ads typically target a few thousand customers. Cook spends about $1,000 and a half day of his time to produce an envelope of 3,000 cards. The return on investment? “If I send the mail to my top recent full-price customers and track it in the database for about three months, I can get several hundred thousand dollars back.”
“It’s a fabulous return,” says Eileen Shulock, vice president of retail strategies at Knowledge Strategies, a marketing consulting firm in New York. “The technology to track what you’re doing in your store is already out there, and very smart retailers are looking to take advantage of that technology, either on a small scale or in direct mail like (Coco) did or on fully customized websites.” Shulock says.
Printing companies can help
Although most of its mailers are generated in-house, Coco outsources its main sales banners: twice a year, 20,000 cards are sent out. Image Builders, a Nashville print shop specializing in custom publishing, creates a “clamshell” card, which includes the graphic image, using traditional four-color printing. The printing company then personalizes those cards by running them through high-performance computerized printers using Coco’s database. The cost is a few cents more per card than internal efforts, but the process improves quality.
Jason Altenburg, vice president of sales for Image Builder, says the technology is making it easier for his clients to reach individual customers. But the key is to have a rich store of customer information to tap into. “Working with David was great because he had complete records of the last 250,000 transactions in his store,” he says. And that’s something every small business owner should think about, especially as database software gets cheaper and easier to use.
Also, print companies are beginning to see possibilities to help retailers personalize their reach. “We no longer see printing as a commodity, but as a service that allows us to actively engage with a company’s marketing department for better results.”
Cook says that attention to detail is the key to his marketing strategy. “It’s like a great symphony: all the pieces have to work well together,” he says. “The image has to be amazing, the right person has to sign the right postcard, with the right message to the right people.”