RELATIONSHIP MARKETING

Let’s take a look at the concepts of retailing in 1930's and 40's when there was a limited selection of product and when retailers knew all of their customers. It was a time when it was easier to have the right product for the right price in the right quantity at the right time. At market, retailers had a list of customers, either on paper or in their minds, and they bought particular merchandise for those customers.

Today, using technology, you can use techniques to focus on the most minute levels of customer needs, to achieve the same results. Let's not worry about where a customer lives, or what is his or her income is. It’s better to know what lifestyles are important to them. What are their likes and dislikes? Their favorite colors? Their sizes? What are their occupations, interests and social activities? And what are those important dates (birthdays, anniversaries or the day they started a new job, etc)? With this critical information, you can buy more effectively, which means you sell more and have a higher inventory turn. And, with great service like this, you can command higher selling prices.

USING CUSTOMER PROFILING

One retailer who has focused on customer is Silverman's, Grand Forks, N.D., which uses ClienTell™ software, a program that helps the store manage its database of 38,000 customers. After the introduction of ClienTell™, Silverman’s doubled its average sale per ticket (now triple national average), doubled the sales per employee and increased advertising effectiveness through direct mail.

You can also obtain these improved results using simple software solutions such as Access, MS Works database managers, Lotus 1-2-3 or Excel spreadsheets and Word Perfect or Microsoft Word word-processing packages. The trick is to gather a lot of information about your customers (see sidebar), so that you can use it to match up with your products and your sales notices.

For example, when you are having a sale, go to your database and select those customers who would be interested in the merchandise you have on sale, and send an advance notice. Use a word processor to extract the information from your database and tailor the invitation to the customer’s needs. A proper customer profile will save both time and money by pinpointing only those customers likely to respond to your sale.

You can also take advantage of the Internet for sales notices, even if you don’t have a presence on the Net or an e-mail address. SaleNews is one company offers advance notice of sales to its subscribers. It uses your database or gathers information for you from visitors to its site. You tell the company about your sale and it sends a notice to those folks who have shown an interest and are in your shopping area. That’s bringing the virtual world to your local market. And, you pay only when an announcement is made.

THE ADVANTAGES OF BARCODING

Barcoding obviously is the most cost-effective way to increase sales productivity and has the fastest payback. After introducing barcode scanning, Toys R Us increased inventory turns 100 percent in 18 months (2.5 to 5); decreased out of stock inventory 80 percent, improved customer service by 70 percent and reduced cashier turnover by 30 percent.

Because of their extensive use of barcoding, larger retailers are forcing all manufacturers to barcode merchandise, a benefit to retailers large and small. Now all you need is a scanner and the accompanying software to take advantage of efficiencies of barcoding.

There are currently three type of scanners on the market: pen wands, CCD and laser scanners. Don’t even consider pen wands! Since you must drag the pen over the barcode, it is ineffective and often misreads. CCD scanners will read the entire barcode, but the scanner must be in contact with the barcode to do so. Laser scanners, on the other hand, can read a barcode without touching it -- some models can read a barcode from 15 feet. Laser scanners are now available for under $600 and manufacturers include Symbol, Welch Allyn and Spectra Physics.

If your suppliers are not barcoding your merchandise, you will also need barcode software (Label Matrix or Power Label; Label Works – for Windows; Quick Bar) and a thermal printer (Barcode Blaster from Cognitive Solutions, Monarch, Sato) to produce the labels.

RESULTS AND COSTS

With a modest investment in technology, you should be able to increase your sales. You can either start from scratch or get more out of your existing system, by adding some low-cost, off-the-shelf software. With the rapid reduction of the cost of computers and software, you will find you can improve your retailing skills for under $1,500.

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Resources:

AmyDoodles: (781) 455-0545 or e-mail to amy@amydoodles.com

Silverman’s: Grand Forks, ND (800) 284-1656

SaleNews: Somerset, NJ 08873 (732) 873-3392 on the Net at http://www.salenews.com or e-mail to info@salenews.com

Software: Spreadsheets, word processors and database programs can be obtained at your local computer store.

ClienTell ™ a software product from Infocorp Computer Solutions, Canada, (204-694-5550), U.S. (407-951-9600) and Europe (41-181-80515) or on the Net at http://www.infocorp.mb.ca