Working IT: Simple technology raises the dead
Last week I wrote about the logic and importance of keeping and building a marketing database. Read it here. It is something sadly neglected in many of the largest through to smallest businesses.
Today I thought you might like to learn about the simple yet clever use of everyday on-hand technology with a database that yielded great results.
While doing research for a speaking engagement for L’Oreal hair care Australia, it was recommended that I interview the owners of ME Hair Salon in Auckland, Andy Grant and Iain Smith.
They had put in place easy, clever marketing and customer service initiatives which achieved great results in a tough economic environment.
They combined clever thinking with three business ingredients to their advantage. A customer database. Everyday technology. Customer communications.
Again, simple assets and activity which so many businesses ignore.
ME run many of the normal marketing activities you would expect. Product supplier incentives and promotions. Advertising in the local paper. Radio advertising for branding.
This is normal activity and not anything special to write about. Let’s examine just two of the things they do that is different.
Raising the dead
Every Monday they print two lists. The previous week’s clients, and those who have not returned in four to six months.
Monday is a quiet day so the receptionist calls the last week’s clients as a customer service follow-up: "How was your appointment?"
The second list they first show to the stylists so they can understand the attrition of their own clientele. Then they have the receptionist call the people on the second list with: "We miss you. How can we bring you back?"
They call this raising the dead.
# Lesson: This raising the dead list not only gives you a great vehicle for feedback and tweaking service – ME normally get 30-40% of the clients to return again.
If you look at the average lifetime value of a client, let’s say $2500 here, this simple exercise has a significant return on investment and it is a productive use of staff time during quiet moments.
500/300/240 Cross marketing
Most salons simply offer hair and perhaps a sideline of makeup or beauty therapy. ME strategically branded their three services as ME (hair), MAKEUP ME and TOUCH ME (beauty therapy).
This gives them three identifiable separate services to cross market.
Their software system has built-in bulk text message merging. Most businesses ignore this software feature. ME ran a campaign sending 500 (SMS) texts to hair clients with a push of a button.
The offer was to use a TOUCH ME or MAKEUP ME service and get a gift voucher of equal value for themselves or a friend for free.
# Lesson: Here you have cross marketing with targeted, inexpensive, easy, Immediate and value-added communications. Their result was 300 of 500, so 60% took up the offer. That is 300 non-discounted new pieces of business and 240 clients gave the voucher to friends, which produced a fabulous inexpensive source of new clients.
Further, by giving vouchers for additional services rather than cutting prices they generated additional revenue from existing clients rather than canabalising hair income. It also created a higher perceived value for all clients than the actual cost.
Time an asset
For many businesses time is a chargeable asset. If lost, it cannot be recouped. When a client is late or doesn’t show, it is lost revenue. ME sends a sms message reminder for all appointments 24 hours in advance.
# Lesson: If you sell time, ensure your clients value it by reminding them of their appointment. The small investment of an 18 cent text creates revenue by allowing you to fill unanticipated gaps. By keeping appointments on track you show your other busy clients you value their time.
Of course, Andy and Iain have business problems like any other. Staff. Clients spending less, which also creates forecasting headaches.
However, their activities should give you food for thought on how you can develop and better use your valuable assets: customer information, everyday technology in hand, staff and communication. It made a whole lot of sense for ME, and to me.
# Debbie Mayo-Smith works with businesses that want more effective management and staff. www.debbiespeaks.co.nz
# Her new book, Conquer Your Email Overload, can be bought at any bookstore or from Debbie at the address below.
# If you would like to WIN a copy of the book, email Debbie at firstname.lastname@example.org with the tip you like the best.
It will be drawn on Friday.