Database Marketing Database marketing is one of the most powerful retail tools to attract and retain customers. Today, the consumer is inundated with so many messages that a retailer must rise above this din to be noticed. Newspaper and other media are increasingly expensive. Smaller ads diminish the importance of specialty retailers compared to the many pages taken by larger competitors. Using direct mail, even a small retailer can have the same impact as a larger one. There are many cost effective software programs available to build an effective marketing program. Pace can identify the most appropriate systems tailored to meet your needs. Email marketing is the most efficient, lowest cost method to reach out to your customers. There are incentive programs that have had great success in attracting customers to join your email contact list. Email marketing is less intrusive and can contain high quality, low cost graphics. More than Just a System The most effective marketing initiatives, however, require more than just a system. There are other companies that are in the business of system selection and implementation but that is just the beginning at Pace. Promotions Pace combines a well-designed marketing system with exciting, unique promotions. It is this combination that has produced response rates as high as 25%. In-store conversion rates are often up to 75% greater than standard and items per sale are frequently 30% above historical productivity. Case Study 1 For years, a retailer operating stores in three states had run percentage-off promotions. Each year, these sale events produced less and less as the public had grown "numb" to the sameness. The percentage of price reductions had to be increased over time to compensate for the gradual loss of impact of these events. Moreover, regular priced future sales were being cannibalized by these constant, anticipated promotions. The regular retail price over time had no credibility. Pace introduced a direct mail event that generated more positive customer response and mail than this company ever received in its history. The average markdown was 8%, the lowest cost promotion this company had ever run. "Have Lunch on Us………..Buy 2 Pair and Invite a Friend." It was sensational and caused more good will and excitement than any promotion this retailer had ever run. Many customers wrote thank you letters. One letter read "Both my stomach and my feet thank you!" How many customers write thank you letters for taking advantage of a promotion? In this instance, the company received several dozen. In the store, a number of customers asked, "How can you afford to do this?" The promotion was viewed as gracious, offering hospitality and perceived value that had much greater impact than another markdown. The strategy was to contract with a prominent restaurant in the area of each store to offer the retailer a fixed price on any item on the menu plus a glass of wine. In exchange, the retailer built a restaurant table at the entrance of each store with the restaurant's linens, place settings and menu. This visual was duplicated in the direct mail. High traffic mall locations and the retailer's customer database benefited the restaurant. The cost of each lunch was below $10 in every case. Case Study 2 A single technical performance sock was mailed to customers that had purchased walking or performance classification items from the retailer over the last two years. Information regarding the health of walking and product information was also included. The customer received the mate free for just coming into the store and trying on a style in those classifications. The list was filtered to eliminate purchasers in the prior 60 days. They also received another pair of socks for each additional pair purchased during the visit. Sales and items per sale soared. This event was funded mostly by vendors. The strategy was to provide each participating vendor with data prior, during and post event. The degree of vendor support was tied to sales performance improvement during and for a period after the event. This client maintained a measurably higher rate of sales after the event with no cannibalization. Our opinion was that the prior focus had caused heightened awareness and customer word of mouth, the very best advertising. A key to maximizing vendor support is solid documentation. Database marketing reaches its full potential when combined with creative, unique promotions. We recommend segmenting customers and reaching out to your very best in ways that produce word of mouth advertising. Strategies such as these reinforce your relationship with your most profitable customers, increase their buying activity and spread the word that adds new customers.