Leverage

Many retailers cannot afford conducting market/consumer research and surveys. Besides being expensive and time-consuming, the outcome of attitudinal research and surveys is questionable.

Many retailers cannot afford conducting market/consumer research and surveys. Besides being expensive and time-consuming, the outcome of attitudinal research and surveys is questionable. With the marketing budget becoming tighter, marketers are adopting efficient marketing which Kotler (1972) defines as producing the desired customer response using the least costly marketing actions.  This seems to be increasingly shifting the marketing focus from attitudinal to behavioural research.

Although the vast majority of today’s retailers maintain customer databases at lower costs, only a few utilize these data. In current markets, customer databases are considered underutilized marketing resources which, once properly used, could well increase revenues. More retailers have recently been encouraged to invest in database marketing and consumer-base analysis. Customer data have become a significant source of revenues and help retailers furnish insights into the behaviours of their customers. It is time for retailers to leverage their existing customer data.

Retailers adopting print marketing techniques can use predictive modelling to 1) save the cost of communicating with customers unlikely to respond; 2 customize their messages/offerings; and 3) ensure that each customer receives the right catalogue, brochure, or invitation letter.

AA New Zealand customizes, and sends out, promotions to their members using members’ home addresses and the location of the petrol station at which members refill their cars most frequently.
AA New Zealand

Tesco customizes thousands of promotion packages and mails them to its 14 million UK customers.
Tesco

Best Buy segmented customers who visit their stores and identified major ones. This let Best Buy:

  1. Tailor the look and feel of its stores in particular markets to fit the representation of the segments in these markets;
  2. Train its store staff to recognize customers from each segment and serve them appropriately.
Best Buy