Learns to Listen to its Customers

Customers may be are changing their spending habits, says Jack Keifer. But if you listen to them and stock what they want, they’ll keep buying, the president/CEO of baby accessories and equipment merchant said earlier this month at eTail in Baltimore.

Keifer said he’s seen some softness in his company’s high-end brands since the current recession hit – something that did not happen after 9/11 or when the dot-com bubble burst.

This helped Keifer realize that while top-line sales are great, a company cannot survive without margins. Especially in a time when consumers are on the Web looking for the best deals.

That’s the kind of cultural change needed, and that other merchants could also benefit from, Keifer said.

“We’ve gone overboard to make sure everyone in our company understands what margin is, and in the last two months, our margin has gone up 10%,” Keifer said. “It really took this recession for us to get everyone from the warehouse down to the call center to understand that we’re not in the business for top-line, but for margin.”

But margin is more than just jacking up prices. It’s looking at all the different business processes, Keifer said.

One big thing that’s helped improve’s margins: Its marketing team made a pledge to transfer up to 85% of its marketing dollars to cost-per-action advertising models from cost-per-click. The difference between the two: pays if a customer not only clicks on an ad, but makes a purchase.

The merchant also learned that listening to your customers can pay off, even in a recession.

Keifer said reports from the call center indicated a sudden interest in black cribs. So Keifer called some of the manufacturers he dealt with and asked if they had, or could, create black cribs.

“I went to every manufacturer we work with, and they laughed at me,” Keifer said. “They said it was the most morbid concept they had ever heard. They refused to make them.”

But Keifer finally found a manufacturer who would make black cribs. And the result? can’t keep them in stock.

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