There’s a new trend in marketing that’s gaining favor and uses name and address files or customer databases as its source. The difference between this new strategy and those of the past is that it asks customers’ permission to be marketed to, making them feel like insiders and increasing loyalty.
Companies once had easy answers when it came to promotion, attracting new customers and keeping existing customers. The tools they used were good value and mass-market advertising.
But things have changed. All cleaners surviving have delivered some level of value—that elusive combination of quality, convenience, service and price. Consumers decide who they believe delivers value, and reward those companies with their business. Companies that don’t deliver value either close or are on the verge of being forced out of the market.
Today, not only must you deliver value, you have to deliver a better value than the competition in order to prosper. Cleaners today are often assumed to deliver quality, so just being “good enough” isn’t good enough.
Why? Because the typical consumer today is more educated and more aggressive in seeking value; as a result, they are less loyal. Customer turnover is high because consumers are always looking for a better deal.
Value has become relative. Consumers actively determine with whom they want to do business by estimating which cleaner delivers the best perceived value for their individual situations. Over time, if the cleaner down the street delivers what’s perceived as a better value than you, you will suffer.
Some readers might be shocked to learn that “high value” does not mean “low price.” For instance, one of the growing components of value is personal service; customers are more loyal if they feel they are important to a business and treated accordingly.
The other component of past success was mass-market advertising. Put your name on a billboard, in the mail or on the radio, and the people would come. This is no longer true. The first cleaner to put coupons in the newspaper probably did very well. Today, there are so many coupons that some cleaners boast that they’ll accept competitors’ coupons. Soon, there may be cleaners who follow the grocery stores and offer double-coupon days.
In advertising, this is known as “clutter.” Clutter means there are so many of the same businesses promoting themselves in the same ways that the consumer can no longer differentiate between the messages. Another term for the phenomenon is “noise.” Like in a crowded restaurant, conversations between two people can be delightful. But when the conversations are heard all at once, they become nothing more than a din.
That’s often how mass-market advertising works. People are bombarded with messages 24 hours a day, seven days a week. If a psychologist ever figures out how dream patterns affect your behavior, I’m sure you’ll soon get ads in your sleep.
Some advertisers have become so sophisticated that they have convinced people that not only should they buy the product, but consumers should pay a premium to advertise the products to others—take Tommy Hilfiger, for example.
How does a cleaner compete for attention in this world of print, radio, TV, the Internet, fashion, signage and junk mail? How does a cleaner catch attention next to Coca-Cola or Microsoft? In mass-market advertising, it is difficult to get noticed and almost impossible to get your message out.
Ask, Then Tell. The new marketing concept proving effective in getting those messages out and building customer loyalty is called “Opt-In” or “Permission-Based” marketing. Like the name says, the idea is that you get the customer’s permission for you to advertise to them. Once you get their permission, the consumer looks forward to receiving advertisements from you.
Of course, you don’t really ask if you can send an advertisement to the consumer. You ask if they would be interested in learning about future sales and promotions, or if they would like to read about taking care of their garments in a newsletter. You increase your value to the consumer by offering something they perceive as a value.
Once they say yes (or “opt in”) it’s your responsibility to send coupons, a newsletter or holiday greetings. Sure, it’s advertising, but the consumer has already agreed to pay attention to you, your company and your message. It is not the same as sending out “Welcome” letters or “We Miss You” cards. The customer never asked for those, and there’s a good possibility that they will get treated like most other ads they receive—with indifference.
Once the consumer opts in, you already know a lot about them: where they live, the economic and demographic makeup of their neighborhood, and whether they are customers or not. You may even know where they work, if both spouses work, and the names and birthdays of their children.
If they are already customers, you know how much they spend and how they spend it. A quick analysis of their visits should tell you if there are any gaps in their purchases during which you can assume they were using the competition.
You can then turn this knowledge into individualized messages. Married-with-children customers might get a different newsletter than single customers. High-volume customers might get different promotions than average-volume customers. You can offer customers savings that are not available to the general public, and by delivering the message to a receptive audience, build their loyalty.
You can also determine what types of customers are likely to be of high value to you. From the combination of sales information and responses to your Opt-In marketing, you can discern the exact markets to target. Look for common traits, search for non-customers who share those traits and approach them with your message. Are they in the same geographic area? Do they have similar demographics?
The method you use to send your message is up to you. Direct mail works well; with routes, you can also leave flyers with deliveries. There are benefits to delivering the message via e-mail, too. You can often track whether the message was read, and the savings on postage can be significant. However, many people do not read their e-mail on a regular basis or don’t yet have Internet access. A combination of direct mail and e-mail may be the most effective way to reach customers—ask how they would like to be reached, and try to avoid duplication.
Like any marketing strategy, a loyalty-building program must be followed on a committed, consistent basis. Returns are not measured in how many customers come in after one newsletter—returns are measured over at least a year by determining how much business you retained. Once you learn how to keep the customers you have, then you can use your database to find new customers who have a high probability of being good customers.
Permission marketing can work as another piece of your comprehensive business-building strategy. People will be willing to take part because they feel they have insider information, and most people appreciate being a “special” customer or prospect. It will take time to develop a database of contacts, but it’s better to start earlier than later. In advertising, it is always better to be first than to play catch-up.