Audio-video retailer United Audio, Northbrook, IL, sent a more targeted and revamped holiday catalog out this year thanks to a new database system that looks closely at cross-sell data.
United Audio, which generates $50 million in yearly sales, previously sent its annual catalog to customers without examining purchase behavior or spending levels. Last month, however, it sent out its 96-page catalog to 75,000 customers based on data it had that highlighted these customers' interests and needs.
As a result of its revamped catalog that included the placement of DVD players next to rear-projection TVs and home-theater systems — items that customers buy together — and the virtual elimination of the less popular single CD players, customers are coming into the company's eight stores in the metropolitan Chicago area in record numbers. According to Al Copland, director of marketing and advertising at United Audio, during Thanksgiving weekend — the first major weekend after the catalog hit — the company has seen a 12 percent increase in traffic. And this comes at a time when audio-video sales are flat around the country.
The company attributes these results to P/CIS, the database marketing and data mining system from Harte-Hanks Data Technologies, Billerica, MA, a division of Harte-Hanks Direct Marketing, that allowed United Audio the chance to define a more accurate model of highly qualified customers. The system created more targeted mailings and helped increase the value of the company's existing customer relationships, since the cost of acquiring new customers was prohibitive.
“We believe there are two types of specialty retailers today,” said Copland.
“Those who believe that the cost of getting new customers via mass media is prohibitive and growing more so,” said Copland. “And those who we don't have to worry about because they're not going to be here.”
Harte-Hanks took customer data from United Audio's point-of-sale system and its seven-year customer history database, merged and purged the file and then sent it through the P/CIS system to do analysis, interpretation and query structuring.
United Audio reran queries based on the refreshed data, charted this data,
and then generated cross-sell reports, which helped the company learn, for example, what customers were buying and if certain customers had a propensity to buy from a certain type of product category.
Creative Marketing Network, Bradview, IL, designed the inside of the catalog and Gaston Advertising, Chicago, designed the cover. The company also used these companies to construct five mini-catalogs that were 12 to 16 pages each, and mailed to the same 75,000 customers from June to November of this year.
Based on its success using cross-sell analysis to refine its mailings this
year, United Audio is planning to extend its direct marketing efforts next year, including sending out nine mini-catalogs instead of five. Also, the company plans to launch some best customer programs based on what it has learned about its top customers through P/CIS.
Copland said after using the P/CIS to determine who is buying and why and over what period of time, he found his best customers were generating the bulk of business. “It can get scary to see how few people are giving us business,” he said. “We have a customer list that is fanatically loyal, and they come to us because we have a relationship with them.”
Elissa Margolis, senior client development manger, Harte-Hanks Data
Technologies, said more and more retailers are using database marketing techniques to find out who their best customers are. Retailers are facing competition not just in the retail environment, but in the variety of other channels out there today, such as the Internet.
