George Matyjewicz

Moderator

E-Tailer’s Digest is a free moderated discussion list on the Internet, where retailers in 40 countries worldwide discuss issues like...

Welcome to E-Tailer's Digest your resource for retail on the Net, and now as a column in Gifts & Decorative Accessories Magazine.

List members post questions, and others help with their real-world experience. So let's get to Everything for the Retailer!

Subject: "Co-Op Advertising" Derrick W Robinson <derrobin@juno.com>⁽¹⁾

Is Co-Op advertising being used on the Net, and how does it work?

Response: Todd Mogren <sales@coastaltool.com>⁽²⁾

Since November, 1995 we have used Co-Op advertising to increase traffic and sales at our Web site Our current sales are between $100,000 - $110,000 per month which is a direct result of advertising purchased on the Net almost entirely with Co-Op funds. Our annual on-line advertising budget is approximately $50,000, of which over $47,000 is Co-Op money.

While we do place ads year round, we concentrate on two periods: March - June and September-December so we squeeze all of our ad dollars into 8 months. It may seem like a minor point but we feel we maximize our exposure. Research has indicated that users who see an ad more than once are more likely to click. I think that is even more true if they see an ad on more than one site. It certainly gives the impression that you are a larger player.

With text ads, you get much wider play than banner (display) ads. We ran sponsorships during the 4th quarter of 1997 in three on-line publications. While results on these buys were mixed, it has not discouraged us, although we have decided to pursue a more targeted audience. The concept of co-op dollars for text ads has been a difficult sell. Manufacturers want their logo displayed, not merely the company name. We hope that manufacturer's continue to pay for text-based ads.

Co-op advertising is one of the most under-utilized resources available to retailers. We spend hours tracking all of our ad money from over 400 vendors. Then hours more creating new ways to spend it. It is our philosophy that Co-Op money is OUR money and every dollar we do not spend is a potential sale not made.

 

Moderator's Comments. Co-Op advertising is the use of funds (usually 2-5% of purchases) allocated to a given retailer by a

manufacturer. Example, ABC retailer buys $100,000 worth of product from Acme , who allocates 2% or $2,000-$5,000 to the ABC co-op fund. ABC agrees to abide by the Co-op guidelines outlined by ACME, i.e. the use of an ACME logo and other restrictions. An ad is placed (banner ad, email publication sponsorship, radio spot, TV commercial, newspaper ad, listing in a mail order catalog) and after proving performance, ACME writes a check covering the cost of the advertisement to ABC.

In my experience, consulting with retailers (and owning a 5 store chain), I find many retailers do not want to be bothered with co-op funds. I agree, it is YOUR money -- use it wisely. Folks, $47,000 represents 94% of Todd's advertising budget! Contact your suppliers today to see what they can do for you. It also looks like manufacturers need to be educated on the value of text ads vs using their logos.

Question: "How do I keep customers yet ask them to pay for breakage?" Sigrid Branham <find@erols.com> ⁽³⁾

1- I have a candle store with a lot of glass (oil lamps, etc.). Signs - more or less obvious - on the shelves state in a very polite way that the customer is responsible for breakage. What do I do with irate customers who simply refuse to pay for the broken item?

2 - What is the route to take with customers who return an item and claim the glass in the box was broken when they unpacked it at home? I am certain I wrapped it in bubble wrap, inspected it before their eyes and yet they bring it back and blame me for the damage? Any advice?

Response: Connie Barrett & Joyce Kaessinger <rainbow@ulster.net> ⁽⁴⁾

In my store I had the same problem, and also had signs. One solution is to keep fragile items in locked showcases. It's an investment, but one which could pay off in a number of ways.

Another is to make the signs even more specific, requesting that the customer not handle fragile items, but to ask a salesperson for assistance. This has the added benefit of being able to give direct

attention to the customer. 

 

When there was breakage I asked the customer to pay half the ticketed price. This diminished the pain, and (assuming that you keystone), recovered your cost, and didn't make it appear that you were attempting to profit from the customer's accident. 

 

The bottom line, though, is that if they won't pay they won't pay. I don't think that a) there's any legal remedy, or b) that it would be worth it.  

 

Regarding customers who return things, saying they were broken when they got home, you seem to be doing all you can. If the item is paid for by credit card, I know that some credit card companies will reimburse the customer. You might investigate this, and suggest it to the customer. Another sign might be in order, one which says something like, "We make sure that all gifts leave this store unbroken. Please travel with them carefully."

 

 

Moderator's Comments. The first question I would ask, is how much does this represent and can it be considered a cost of sales? For smaller retailers, unfortunately, every piece represents a larger percentage of business. Customer service and interaction is probably the most difficult function that a retailer

has -- either on- or off-line. It takes a special talent to tell people they are wrong and to keep them

smiling and coming back.

 

 

Psychographics.

 

Question: What is Psychographics? "Ron S. La Vine, MBA" <intellworks@earthlink.net> ⁽⁵⁾

 

What is the difference between Psychographics and Demographics and are there specific advantages to each one?

 

First Response: Jacques Chevron <jchevron@ais.net> ⁽⁶⁾

 

I see two issues:

 

Psychographics as a marketing planning tool, and Psychographics as a fuzzy tool to help us understand the market.

 

As a marketing planning tool, i.e. some way to size your consumer and as a way to measure the audience of a given media support, it is of limited use. While technically it is possible to express any consumer in terms of their Psychographics characteristics and match those with the characteristics of, say, a magazine audience, I doubt that a media planner would dare do that: Those Psychographics measures give you a warm feeling but I have never met a planner who could really explain what the measures meant.

 

As a fuzzy tool, Psychographics are useful as are any data that helps us understand to whom we're trying to market. In that context, the precise meaning of any demographic or Psychographic measure is not as important as the picture of the consumer which, together, help us elaborate in our minds.

 

 

Next Response: Shawn Berry <sberry@gers.com> ⁽⁷⁾

 

Psychographics, the real driver in consumer marketing today, is about what activities people do. It is all about lifestyle, and what people do with their disposable income. Demographics can only be a starting point, when targeting potential customers.

 

Psychographics sifts out buying behavior, and can be done easily by an ad, direct mail, or marketing pro. Not everyone who makes $50k and lives in zip code 12345, will even want to buy your product. The key is to find the same people who have the same buying behavior- after using demographic techniques. Marketers must look at what motivates their targets - their values, behaviors, and beliefs.

 

So, Take a trip down to any library and find the Cole's directory, and see how your neighborhood rates.....Also, look up some information on VALS, to get a better idea of how we are all being

targeted by others.

 

Moderator’s Comments. Psychographics vs demographics has been discussed often, both on- and off-line. Some folks believe "Psychographics" is an outdated and overused term. Then there are real-world retailers who understand their customers, and are able to use technology to capitalize on that knowledge to increase business and keep customers satisfied.