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Monday, July 13, 2009

Target your existing customer database to increase the bottom line!

There are certain items that are a permanent fixture on my daily "to do" list. These are typically among my least favorite tasks, so they never seem to get crossed off as "done." There is always a squeakier wheel in need of attention. Quitting time comes and I find refuge in the immortal words of Scarlett O'Hara: "I will think about it tomorrow." Unfortunately, tomorrow is often a repeat of today and the task remains sadly neglected.

Many specialty craft retailers are squeamish about Marketing. They got into the business because they were passionate about the craft, not about business. They know that marketing is important, but they don't deal with it. It is easy to let other business demands get in the way. They do not like being pushy. They don't want to annoy their customers. They know that they should schedule more promotions, but it seems like they never have time. They wanted to place that newspaper ad, but the deadline came and payroll was due. Blah. Blah. Blah. Been there, done that. OK, so the business is holding its own but the dismal economy is starting to impact the bottom line.

What is the Crafty Retailer to do?

Put on those big girl panties and DEAL WITH IT! Marketing doesn't have to be costly. It doesn't have to be scary. Start small by going after the consumer who already loves you---your CURRENT CUSTOMER! It takes significantly more time and money to cultivate a new customer than it does to market to an existing one. Surprisingly, many business owners focus on acquisition rather than retention. There is an assumption that once a sale is made, the customer will return. This is not always the case. Unless you are the only game in town (not likely given the close proximity of the Internet competitor!) your customers can, and will, forget about you. It is up to you to remind them about your cozy store, incredible product line, free classes, etc.

Follow these simple steps and you will see an immediate impact at the register:

1. Make a list of all of your customers. An excel spreadsheet is a cheap, low tech way to keep track of the data. Include name, address, phone contact, email contact. If possible, include pertinent details such as birthday, twitter ID, spouse's contact info, and shopping preferences.

2. Classify each customer and devise your plan of attack. I breakdown my customer list as follows:
PITA Customer
The juice ain't worth the squeeze. The PITA is the Pain in the A-- customer who is so toxic that you are well to be rid of her. Plan of Attack: Refer her to a competitor and count your blessings.

Marginal Customer
A marginal customer accounts for 1% to 24% of the sales volume. Plan of Attack: Plan to send her at least one email per quarter and make sure that you do it.

Solid Customer
She represents 25% to 75% of the business. Plan of Attack: Send her monthly emails, and make a phone call to promote big events. Follow through with the plan!

Superior Customer
She represents between 76% and 100% of the business. Plan of Attack: Weekly contact, via face to face interaction, telephone, or email. The follow through is easy here....this customer is always in your store. Three cheers for the SUPERIOR CUSTOMER!

3. Invite your superior customers to become a part of a store "focus group." You cannot possibly read every blog, peruse every craft site, learn every technique. Your superior customers love you and probably feel vested in the success of your establishment. Invite them in after hours. Provide food and drink and then let the brain picking begin! The benefits are tangible: you will gain valuable insight into what your customers are looking for in your store--what is working and what is not. Do you know what other crafts your clients are into? This is a good chance to find out! Your classes aren't filling up? This group will offer feedback. The focus group members will know that you value their insight and you will have turned each customer into a rabid fan! Send each guest home with a little gift for a job well done! Pizza: $30 Wine: $24 Gift: $40 Impact: PRICELESS!

4. Communicate with your customers. Seriously...real conversation, not the ridiculous "let me know if I can help you" mantra so common among sales people who don't give a darn. Find out what other crafts hold their attention. Determine what brought them into your store rather than to the competitor down the street. Did you just make a big sale? Follow up with a handwritten note thanking the customer for her business. Set a goal to send out just five "Thank you notes" a week and you will be amazed by the response you get from the half hour of time you invested.

5. Don't lose site of a lost or missing customer! If you haven't heard from a customer in a few months then it is time to pick up the phone and remind her that you are there and that there are exciting things happening in the shop. She might be taking a break from crafting and your call might be the gentle push that she needs. Her life might be too busy/stressful for her to come out and play, but she will remember that you cared enough to inquire when she is ready to jump back in.

A study by the Rockefeller Foundation revealed that customers leave for the following reasons:

Complaints were not handled effectively: 14%
Lured away by competition: 9%
Customer relocated: 9%
No special reason: 68%

NO SPECIAL REASON? What the heck does that mean? My guess is that the customer simply did not have a reason to stay! Benign neglect made it possible for them to forget about you. Ouch. Fight for 'em! They liked you once and they can like you again! Pick up the phone or send a "We Miss You" coupon to entice them to cross your threshold.

A slow economy simply means that you will have to work smarter. There is lots of money to be made---make sure that you get your fair share! Now if you will excuse me, I have some Thank You notes to write!


OTHER NEWS:
Need a vehicle for the emails we have been encouraging you to send? I have used Constant Contact for years and love it! I have no affiliation with the company, other than my experience as a satisfied customer. The customer service is outstanding, the templates are great, the learning curve is short, and the reports provide a wealth of information. Want a free trial? Check them out!


Congratulations to
the winners of our drawing for the crystal embellishment packages: Lora Holman of The Bead Biz and Kelli Burns of The Hole Bead Shoppe, contributed great comments for our June "dead inventory" challenge and each will receive the spectacular assortment pictured at left!


We will draw a name from those who comment on any Crafty Retailer post from June 30 through July 31 and the lucky winner will receive a copy of Diane Gilleland's Book, Making a Great Blog: A Guide for Creative People. It is a "must have" resource for any new crafty blogger!


4 comments:

  1. Great article! Good/useful tips plus I especially appreciate the referral to Constant Contact. (I've been wanting to research for something like that but you know how it is... "I'll think about it..." when all the other things on my to-do list get done, lol!)


    Thanks!

    PS. I found this via DIY Alert newsletter, but you can find me on Twitter http://twitter.com/flowersbyfarha

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  2. Constant Contact is an excellent resource. The hard part is gathering all of the email addresses! I find that a free offer works well. For example, if someone is willing to sign your email list, she can get 20% off the next purchase of one of your fabulous flowers! The money you lose in the short term will easily be recovered in the long term.

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  3. I've been thinking about this some more. One thing that would be helpful (perhaps another blogpost?) are suggested opening gambits. "Small talk" with strangers has always been hard for me, and finding the just right opening phrase is especially challenging. I often greet ("welcome to...") and introduce myself as "the artist and available to answer questions or assist you when ready." Then the challenge is how to be available without hovering, engage without being so engaging that the customer is completely derailed from shopping/buying.

    What are some open-ended, welcoming, engaging questions that doesn't send the "skittish as a deer" potential customer away?

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  4. You raise an excellent point! Awkward small talk can be the kiss of death for a salesperson, while real communication can close the deal. I think this is an excellent subject for a future post. Until then...A welcoming smile accompanied by eye contact is critical. An easy opening line:

    Hey there! Are you here to find what you need to finish a project or start a new one? We just got in some incredible XYZ that everyone is going nuts over!

    One thing that works to your advantage is that both you and your customer already share a genuine interest: Crafting. I always have good luck when I ask what project the customer is currently working on, because it invariably leads to a discussion of that craft and others. It is easy to talk about the compulsive nature of crafting and to confess to all of the unfinished projects that you have hidden away in the closet. You will probably share a giggle because she will be able to relate...most crafters have a stash in the closet, under the bed, etc. I have always been very shy and would get slightly nauseous at the thought of initiating small talk. It gets easier with practice and soon it won't be an issue at all! Good luck!

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