Building a file from retail names

Oct 01, 2009 9:30 PM  By

Imagine a customer walking into your store to buy a gift for a friend. You invest time serving the customer, build a one-to-one relationship, and make the sale.

If this transaction took place online, the customer would have to give you her name and billing address, an e-mail address and a phone number, which opens up the lines for future communications.

But in the case of the retail store, unless you ask the customer for her information — and she agrees to give it to you — you miss opportunities to market to that customer down the road.

So what does it take to build a database of your in-store customers? You need to give the customer a compelling offer or reason to share his or her information. You also need a POS system that will allow you to enter that information in real-time. And you have to properly train your store sales clerks to collect the data.

Store employees must understand their role in the organization, and how capturing the customer’s address will both grow the business and make the customer loyal, says Phil McMannis, a marketing program specialist with address verification software provider Experian QAS.

“Clerks can see asking for the address as another tedious task they have to handle,” McMannis says. “Or it could be a busy Saturday in the store, and the clerk may think asking for the name is a hindrance to getting the customers through the line.”

At upscale retailer Saks Fifth Avenue, salespeople at the 54 stores are required to ask the customers for their information. Saks has goals both at the store and department level, says Kakoli Seal, vice president-customer insight and database marketing, on the ratio of customer information received vs. transactions.

Those goals vary by department and on the volume of traffic and the individual care required per department. The jewelry and perfume departments tend to have one-to-one interaction between the clerk and the customer, so the goals are higher.

“It’s the salesperson’s job to build a relationship with the customer,” Seal says. “And at the end of the day, the salesperson is measured by the depth of the relationship they have built.”

Seal says Saks uses e-mail, postal addresses and phone to communicate with its customers. Salespeople will call their customers to let them know about specific in-store events, and at times the retailer does mailings at the store level.

How can store clerks encourage customers to give up their data? “If a customer asks why they need to give us their name and address, we tell them we would like to add them to our mailing list,” says Joe Mediate, CEO/chief marketing officer at children’s furniture and apparel merchant Koo Koo Bear Kids, which opened its first retail location in April. “If customers agree to give us that information, chances are they will be a qualified lead.”

Naturally, the information collected must be correct. And some believe your chances of getting it right are better if the customer inputs the data rather than the clerk.

Some merchants will ask the customer to fill out a form to receive a loyalty club card, even if it means just getting a name and an e-mail address at the checkout and then having customers enter their own information after they receive confirmation e-mails.

If the information entered by the merchant is incorrect, it causes all sorts of customer service issues — not to mention back-end problems such as incorrect mailings.

Austin Bliss, president of e-mail marketing services firm Fresh Address, says an incorrect e-mail address can lead to unfulfilled promises by the retailer.

“If you promise to e-mail a customer a $5 coupon for enrolling in your loyalty club, and you send it to a bad e-mail address, you are not fulfilling your promise,” Bliss says. “That becomes a customer service problem, and suddenly you have additional cost and increased load on your call center, because customers will call asking why they didn’t receive the coupon.”

The best practice for accepting the customer information is to enter it right in the POS. And if the POS includes real-time address verification software, most of these issues can be thwarted instantly, Experian QAS’s McMannis says.

Using his company’s Findit and Matchit software programs as an example, McMannis says the system will red-flag an incorrect address as it’s being entered into the POS, which allows the clerk to verify what may not match up with the U.S. Postal Service’s database.

The most common: A zip code that gets re-zoned, a missing apartment number, or a new subdivision that may not appear in the USPS database yet.

In a case like a new subdivision — or for Saks Fifth Avenue customers, an international address — the clerk can bypass the address entry and proceed with the transaction.

But even if the address is entered correctly by the clerk, Bliss believes there is no substitution for proper list hygiene. Bliss is in favor of batch processing those names to ensure that undetectable information such as bad e-mail addresses are fixed.

If an e-mail address is entered incorrectly, there’s a good chance it may never get fixed. But Bliss says that, too, can be taken care of with retail training.

“If the clerk is not given an incentive to keystroke the address correctly, your attempt to collect e-mail addresses is going to backfire,” Bliss says. “You should establish a standard for the clerks, like a goal based on deliverable e-mail addresses vs. the number of e-mail addresses entered.”

MARKET SNAPSHOT: GENERAL MERCHANDISE

UNIVERSE GETTING SMALLER

THE GENERAL MERCHANDISE CATEGORY LOST 607,000 NAMES between the second quarter of 2008 and the same period this year, according to New York-based list services firm ParadyszMatera.

Though the segment grew from 20.8 million in the second quarter of 2008 to 21.6 million in the third quarter of 2008, ParadyszMatera says the pool of general merchandise buyer names is going to take a huge hit. That’s because J.C. Penney — which has the largest of all the general merchandise buyer files — decided in the third quarter of this year to remove its 2.6 million names from the market.

More house files in the segment are seeing a decline in names than a lift. Thirty-two percent of general merchandise lists fell by 10% or less, and 21% are seeing a drop of 11% or more. In contrast, 7% of general merchants grew their house files 10% or less, and 29% grew their house files 11% or more.

And with the number of names down, the value of general merchandise lists is rising. The average rental price has risen 1.4%, to $104.69 per thousand names, since the second quarter of 2007.
TP