Direct Selling: Straight to the Source

Four marketers use customer research to their advantage

July 2007 By Jack Schmid

multipage

2. Who are your customers, and how do they perceive your brand?

An upscale gift and apparel com-pany with catalogs, a Web site and retail stores mailed a four-page questionnaire at about an 18-month frequency. The research went to four customer segments:
• Best—multibuyers (three or more times) who purchased in the last 12 months;
• Good—multibuyers (two or more times) who purchased in the last 12 months;
• First-time—new-to-file buyers who purchased in the last six to 12 months; and
• Lapsed—inactive multibuyers (two or more times) whose last purchase was more than 12 to 18 months ago.

The customer segments were further divided by primary buying channel—catalog, Internet or retail. The survey was mailed First Class to a random sampling of each of the four customer segments whose primary buying channel was catalog or store. Internet buyers were sent the survey by e-mail. Response rates varied by customer affinity to the company. The greater the customers’ affinity, the higher the response rate. Several customer segments responded at nearly 40 percent. Other segments responded at as low as 10 percent. Incentives for completing and returning the survey were used to enhance response. The type of information this survey attempted to track and measure included:
• The competition: How do customers shop—catalog, Internet or retail? What companies are their favorites?
• How does the company stack up against the competition in such areas as: unique, distinctive merchandise; quality of the products; value (price-quality relationship); prompt delivery; ease of returning merchandise; ease and convenience of ordering, via all channels; and accuracy of the order.
• What factors would heighten customers’ interest in repeat ordering?
• Customer demographic information.
• Psychographic questions, such as magazines read, television shows watched, Internet sites visited, etc.

3. What are customers’ perceptions toward a new branding and catalog creative effort?

A multichannel marketer decided to gauge its customers’ perceptions toward a re-branding effort that included new merchandising as well as catalog creative. A survey went only to elite multibuying catalog and Internet customers. Telephone calls and an e-mail effort were selected as the most efficient and timely methods of researching customers’ perceptions. A minimum of 100 completed calls and 100 e-mail responses was the goal to provide statistical relevance.

In an ideal world, the company might have done a head-to-head test of the old creative design against a new catalog presentation. That option was not pursued because of the cost of producing two versions of the book. The research was conducted about seven to 10 days after the anticipated in-home mail date of the catalog. Since this survey was going to the top, elite multi-buyers, the company was interested in receiving a relative quantitative read on such issues as:
• Did customers recall receiving the catalog?
• Have they had the opportunity to read/review it?
• Did customers recognize that new product categories had been added to the catalog?
• What did customers think of the new product categories?
• Did customers recognize that the design had changed dramatically from previous books?
• What is their impression of the design change? Positive, negative or so-so?
• Did customers recognize the re-branding? What is their impression? Positive, negative or so-so?
• Does the catalog seem approachable or is it too elite?
• What types of offers will motivate best customers to further action?
• Customer demographic infor-mation.

4. What format, size and creative presentation is best served in a new catalog start-up by a retailer?

Several years ago, a national retailer wanted to undertake a major catalog-feasibility study, including financial analyses and five-year projections. With a positive report of the market opportunity, it elected to conduct a series of focus groups to answer a number of questions. The brand image and identity of the store were extremely well-conceived, and the focus group research was viewed as a means of fine-tuning the catalog offering and creative presentation. The focus research was planned for three cities in which the firm had strong store concentration. Two groups of customers were invited to focus group sessions in each city: 1) known repeat-buying store customers in the corporate database who lived within a 10 mile radius of a store; and 2) non-buyers who also lived within a 10 mile radius of a store, fit the demographic profile of good customers but weren’t in the corporate database.

Answers to their questions, albeit qualitative, were focused on merchandising, creative design and offers such as:
• What format should the catalog take: standard 83⁄8˝ x 107⁄8˝, digest-size, square-size or oversized?
• What should the catalog look like from a creative design standpoint?
• What is the optimum number of pages to adequately present the product lines and give the book sufficient “heft” to feel like a catalog?
• What product categories are most important to loyal, repeat-buying store customers so that they can be emphasized in the catalog?
• What differences in design, format and product categories are important to customers versus prospects?
• What types of incentives are most effective to motivate good customers to action? For prospective customers?

Three creative presentations were prepared that represented a wide diversity in size, shape and presentation. Two of the creative versions were a fairly wide departure from what successful catalogers know works and produces the best results. The bottom-line answer repeated in each of the three geographical regions and with both customers and prospects was that everybody desired a more “traditional” catalog creative presentation. Had the company pursued a far-out, radical creative design and positioning, customers and prospects alike would have rebelled and been turned off by the promotion.

Research Options

What these case studies point out is that research can take on many forms. Customer research should be geared toward what the marketer is trying to accomplish.

Clearly, a top goal for successful direct marketing companies is to better understand who customers are and what their attitudes are toward the company’s brand, catalog, Web site and store. Effective multichannel firms add research to their arsenal of skills to better connect with and meet the expectations of their customers.

Jack Schmid is president of J. Schmid & Associates Inc., in Mission, Kan. He can be reached at (913) 236-8988 or jacks@jschmid.com.

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