From TheWiseMarketer.com  E-loyalty marketing for SMEs meets with success Saturday May 10, 2003   With the recent downturn in the global economy, many smaller businesses are turning to new ways of retaining customers and increasing satisfaction. Despite being traditionally associated with larger organisations, loyalty and e-loyalty programmes are increasing in popularity and affordability among small and medium-sized businesses (SMEs). Looking back at first principles, and realising that a 5% increase in a company's customer retention rate can nearly double profits over a five-year span, many small businesses are now starting to advance into the field of loyalty. For example, the US-based Unfinished Furniture Depot is a small business that has seen rapid success from a customer loyalty programme. This article is copyright 2003 TheWiseMarketer.com. According to Dave Banko, president of Loyalty Marketing Solutions (which provided UF Depot with its loyalty programme), "The technology we used for UF Depot made it possible to learn about and identify each customer. And by monitoring customer behaviour, it's possible to learn what they need, when they need it, and why they need it." LMS then took the information acquired from the programme and used it to create e-mail promotions targeted at those individuals. Best channel One successful approach has been to use company e-mail newsletters to communicate with customers. By stressing both an informational and promotional message in each e-newsletter, consumers are more likely to open, read, and interact with each newsletter they receive from the business. "It is an element of trust between the consumer and the business," explained Banko. "The newsletter's message needs to be informative and useful to the customer for them to read the messages month after month. If it fails to do this, the database will shrink and become much less valuable." Based on his own experience, Banko says that small businesses are learning that to compete with their big-business competition they need to have marketing strategies like their larger counterparts. And, with the ever-evolving technology behind loyalty programmes, cost of ownership is becoming more bearable for SMEs.

Industry News ... Atlanta store builds loyalty with e-mail September 11, 2002 By Brian Carroll ATLANTA -- In the fiercely competitive home furnishings market here, Unfinished Furniture Depot executives felt they needed to separate themselves from other local stores in their category, and also from the big national chains. A big part of their answer has been e-mail. They turned to Loyalty Marketing Solutions in Marietta, Ga., to develop a monthly Preferred Customer e-mail newsletter, which was launched in May. To collect the e-mail addresses of customers and potential customers, UFD used three methods - a rocking chair giveaway that required contest registrations, an online sign-up via the UFD's Web site at www.ufdepot.com, and an in-store sign-up campaign. The campaign has so far yielded more than 1,000 e-mail addresses with 200 to 300 added each month. When collecting personally identifiable information, UFD also recorded consumers' birth dates for a "free birthday gift" promotion the store is planning. "It (is) a great way to give the customer a personal connection with the store," said Mike Gavalas, UFD's vice president of marketing. Since creating the database in April, UFD has mailed out a monthly HTML e-mail newsletter that includes unfinished furniture tips, discounts and coupons. It has been difficult, however, to measure effectiveness. Gavalas says he gets positive feedback from customers, but finds it impossible to track increases in traffic or sales stemming from the newsletters. Gavalas said UFD can point to sales surges, however, on the items promoted in each monthly newsletter. These promotions give recipients as much as 50% off the in-store price. "We always notice spikes in Web traffic as well as store traffic every time the newsletter goes out," he said. "I guess the biggest indication of how the newsletter is received is the percentage of people who stay on the list. Our retention rate has been over 99.7%." One of UFD's big concerns was customer privacy. It didn't want its database vulnerable to security breaches. LMS, a marketing and advertising firm, used a Web-based e-mail software program to ensure confidentiality, preventing any recipient from seeing others getting the newsletter. Additionally, UFD pledges not to sell or give information to third parties. "That would ruin consumer confidence in our e-mail campaigns as well as their confidence in our stores," Gavalas said. "Every sign-up sheet has the bold phrase, 'We will Never, Ever give or sell your information to anyone.'" LMS has tracked the click-through ratio of customers receiving the newsletter to those who interact with the content by clicking on a hyperlink. Some months more than 40% of recipients click somewhere in the newsletter, ranging from clicking through to the store's Web site to looking at sale items to printing and redeeming coupons. Although consumer interest has not been a problem, initial resistance from employees was a challenge. "It is something (the employees) have to believe will help them make more sales," Gavalas said. "But now they are seeing the benefits and are asking everyone who enters the stores to join the list. This campaign is a great way to stay in front of our best customers each month at very little cost." Founded in 1991, UFD has four stores in metro Atlanta, in Marietta, Atlanta, Duluth and Kennesaw. The chain specializes in solid wood, selling Archbold, Mastercraft and Whittier, among other lines. *For complete coverage of the furniture industry, see the weekly print issue of Furniture/Today. Click here for subscription information.