Relationship Marketing Economics

Customer Experience, DataBase Marketing, Lab Store, Marketing thru Operations

Just opened up a carton from a manufacturer we use in the Lab Store.  Every unit inside looks like this:

Bad nozzle

Here’s your challenge:

Would anybody in your business recognize this as a problem?  Or would they just shrug and transfer the item to the picking racks?

In other words, finding this, would you or an employee:

1.  Ship to the customer as is, let the customer figure it out

2.  Cut the nozzle off so customer doesn’t have to even think about it, doesn’t have to send you e-mail or call asking about it

Your answer to this question depends on:

1.  How customer-centric you / your org really is

2.  How much you understand about the financials of your business

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Lab Store: Year End Analysis

DataBase Marketing, Lab Store, Marketing thru Operations, Web Analytics

Some stats from the Lab Store (Background) for the year:

Processed 10,172 orders, up 3% from last year, despite a logistical problem in the business model we did not have control over (breeding of animals).  Fixed that, so should not be an issue going forward.  Merchandise Return Rate of .3% on dollars, which is quite low.

Returns cost money to process, imply negative Social feedback, and increase customer defection by creating poor experience.  We do everything we can up front to keep returns and other negative experiences from happening in the first place by screening products and actually taking action on customer feedback and analysis.  Often, we modify packaging, create our own instructions, or assemble products we know people will have trouble with.  More on this idea here: Marketing through Operations and Panic Pack!.

We retained between 75% – 87% of our best buyers depending on what time frame you use, and further improvement in these stats is pending test results.  More on this idea here: Frequent Buyer Analysis.

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A Budget for Discounts?

DataBase Marketing, Driller Q & A

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Q: For the first time ever, we have a Discount budget built into our financial plan. We’ve been told this number in the budget is less than we used last year, but our Sales target is a bit higher. We’re supposed to hit our sales targets while at the same time not going over budget with our Discounts to generate those sales. This directive comes from Finance.

A: You have just been offered the opportunity to graduate from Advertising to Marketing!

Q: We are fairly sure if we reduce the discounts we give, response is going to fall and so are sales, especially from best customers. Or we could keep the same discounts but do fewer discount promotions, with probably the same effect on sales. Are there any other alternatives, any ideas on how to manage this discount budget issue?

We’re an online only retailer.

A: Sure, ask an easy one over the holidays!

Seriously, I hope you did not take my comment about graduating from Advertising to Marketing the wrong way. This is really an opportunity for you to shine in so many ways, and to learn a lot of new ideas in the process – if you want to take advantage of it.

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