Data is getting more complex by the day, digital and social channels are multiplying, and consumers are increasingly doing more shopping and research on-line before even stepping into your store. What does this mean for you? Today’s on-the-go furniture consumers are more difficult to target than ever before.
Jeff Giagnocavo of Gardner’s Mattress & More, recently wrote an article for the January/February issue of Furniture World discussing just this – how to better reach consumers with messages and offers to which they are most likely to respond. By drawing a “line in the sand” and deciding to open a second discount location, Gardner’s can focus on their most profitable customers while still appealing to customer segments looking for bargains. (See Jeff’s article Here
As a data management company, we frequently work with furniture retailers to help them draw their own line in the sand – using data solutions to make strategic business changes to better target profitable customers and new “look-alike” prospects.
We recently worked with a regional, multi-store furniture retailer who was struggling to evaluate their marketing data to better target consumers for acquisition and retention. Because their data was in multiple systems, marketing was heavily reliant on the IT department to get it into a format that could be used. Procuring lists was often a time-consuming and unproductive process.
Duplicate customer records also caused a high level of wasted marketing expenditures. Without a system to identify and merge duplicate customer records, mailings were sometimes sent to the same person or business. This not only damaged customer relationships, but the retailer needed a better way to prudently monitor marketing budgets.
By implementing a solution to better manage marketing data and perform analytics, this retailer reduced marketing spend and was able to better align offers to the right consumers, drive up-sell and cross-sell opportunities, increase customer retention and loyalty.
Many retailers tend to shy away from a marketing database project, believing the project will be overly time-consuming. However, managing customer data and implementing an analytics solution is not as difficult as you may believe. In the previous example, a fully functional marketing solution was delivered in 8 weeks.
Here are some critical steps to help you get started, as well as real-life examples.
Data Step One
Pull Your Data into a Marketing Database:
Your customers are interacting with you across multiple channels, such as billing departments, POS, digital media, customer service centers, email, and more. This data may be stored in multiple systems across the company. When all this customer information is pulled together into a single view, you can better understand who your customers are, what they value, and ultimately, what will motivate them to buy more furniture.
The multi-store furniture retailer mentioned previously, cleaned and integrated 7 sources of data, including POS, credit data, and online behavior. Now all their marketing channels are supported with an emphasis on digital and mail.
Your marketing database should also include controls to ensure the data is accurate and remains current. Data decays at an average rate of 2 percent per month, which means you can expect 25 to 30 percent of your company’s contact data to go bad each year under normal circumstances. (Source: NetProspex) Customers move, names are misspelled, and households split. A marketing database solution will include data quality measures, ensuring you avoid being a victim to the adage “Garbage In, Garbage Out”.
Once you are ready to move forward with a marketing database project, a data solutions provider will perform the following functions:
- Perform a business needs analysis to help you determine what data should be integrated, how you prefer to access the data, and other strategic goals you are trying to accomplish.
- Use a software solution to integrate multiple data sources and types, eliminate duplicate data, and consolidate customer data into a single record.
- Append missing customer information, such as household income, age, occupation, hobbies, and other key demographic and psychographic attributes for a more complete view of the customer.
Identify Your Best Customers and Prospects: Your furniture customers are rich resources of information. To identify high-value customers and best prospects, use an analytics solution to analyze any number of customer characteristics, such as:
- Behavioral Characteristics: Analyze behavioral characteristics such as frequency of purchase and which response channels customers use. For example, did they respond to an email, direct mail piece, or browse on-line before visiting your store?
- Demographics: These are factual characteristics, such as age, gender, occupation, and income. For example, are the majority of your customers female or male? Where do they live? Are they single or married?
- Psychographics: Evaluate their values, attitudes, lifestyles. Psychographic information answers questions such as what motivates your customers to buy your products and services? What are their key values? What are their hobbies and habits?
- Value-Based: Measure the actual or potential revenue of customers and prospects and the costs of maintaining relationships with them. Analyzing these attributes will help you better allocate resources to the most-profitable customer groups.
Based on any combination of these characteristics, you can identify key customer segments and develop marketing strategies designed to generate the most profit from each unique customer group. Incorporating business intelligence tools will allow a retailer to perform a variety of customer centric analytics based on these characteristics, as well as online behavior and in-store purchase history trending over multiple years. For example, it becomes easy to:
- Determine a demographic profile of your best customer over the last 7 years and match in real time against a consumer file of new prospects within 30 miles of a store location for an outreach campaign.
- Identify a customer subset that has purchased certain categories (living room, home office) and append with updated address and demographic data to execute onboarding campaign for different promotions.
Analytics can be used to identify a variety of other opportunities as well, such as sales trending by store location or which customer segments are most ideal for cross-sell and up-sell offers.
Market to Consumers with Targeted Campaigns:
While media outlets such as television and newspaper advertising will continue to attract new shoppers, using data for targeted campaigns has the potential to really ramp up your customer acquisition strategies. With a marketing database and analytics solution in place, your customer and prospect records can quickly be exported for targeted multi-channel campaigns, such as direct mail or email marketing.
Once a data solution is in place, profiling and behavioral trigger based marketing automation can be used to find new sales opportunities:
- Use of purchase history to determine when it’s time to buy something new.
- Cross merchandising (When you buy a bed, get $100 off a new mattress)
- Frequency campaigns (We haven’t seen you in a while).
- Special events and direct mail campaigns (private shopping events and special store events based on a customer’s location and total sales amount).
For years, furniture retailers have used strategies to broadcast to the masses. However, take a look at some of these compelling statistics from retailers using data to deploy targeted direct mail and email campaigns:
- 44% of consumers made at least one purchase last year based on a promotional email they received. (Convince and Convert)
- 60% of marketers say that email marketing is producing an ROI for their organization. (MarketingSherpa)
- On average, direct mail advertising gives a business a 13 to 1 return on investment. (DMA)
- 70% of customers renew a business relationship because of a direct mail promotion (DMA).
With an integrated marketing database and analytics solution, you can reap huge competitive advantages and will be better primed to expand your marketing strategies into other areas, such as more digitally focused strategies to attract millennial consumers. Of course, it all begins with the data, or more importantly, data that has been transformed into comprehensive insights about your best customers and prospects.
About Anders Ekman:
Anders serves as President of DataMentors. Previously, Anders was Executive Vice President of MRM Worldwide, serving as Eastern Region head and Chief Growth Officer. While at MRM, Anders drove the company’s evolution by bringing data-driven innovation to clients such as the US Army, MasterCard and Kohl’s. Anders has also served as a Senior Vice President at Digitas, building CRM infrastructure and marketing success for the firm’s largest clients, including GM and AT&T Wireless.
About DataMentors: DataMentors provides data quality, data management, data-as-a-service, and business intelligence solutions. DataMentors, recognized by Gartner for data quality for the past seven years, provides valuable data insights to help companies increase revenue, maximize customer value, reduce risk, and grow businesses.
DataMentors is offering a free data assessment to Furniture World readers. To schedule an assessment visit http://solutions.datamentors.com/data-quality-analysis-new
Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada. In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact firstname.lastname@example.org.