Building on Customer Satisfaction
Member-get-a-member campaigns aren't just a sideshow to your regular prospecting efforts. As Select Comfort has found out, customer referrals can be a significant source of new customers and revenue.
Select Comfort, which sells air mattresses direct to consumers and through retail, has moved far past the simple act of providing space on its order forms for customers to write in the names of friends and family who might be interested in a mailing or catalog. Its referral program merits its own mailings, 200,000 to 400,000 pieces per quarter, and has been an integral part of its marketing efforts since early 1998.
Tim Werner, vice president of direct mail and database marketing, explains that once a person buys a mattress, the company can leverage the new customer in two ways: sell him another mattress for one of the other rooms in his house or for a summer house, and get him to recommend the mattresses to a friend.
Select Comfort segments its database of about 850,000 customers to pull out which individuals might be likely to buy again or to refer the product to someone else.
Because the mattresses are high-ticket products--starting at $799.98 and peaking at $1,999.98--Select Comfort uses its member-get-a-member mailings to both reinforce the initial sale and to encourage customers to share their satisfaction with others. To support second sales and referral sales, the mailings contain two coupons with sizeable discounts--$100 to $250--that can be used by either the customer or his friends and family.
Werner says that the marketing team uses different formats and themes, like holiday promotions, to keep its referral campaigns fresh, but the discount offer stays constant.
A recent package features a 6" x 103Ú4" outer envelope with photos of people enjoying their Select Comfort air mattresses (389SELCOM0600); in several places, copy tells recipients that the offer inside is just for Select Comfort owners.
Inside, a 91Ú4" x 161Ú2" tri-folded letter reinforces the customer's satisfaction with his purchase and asks him for his help in "spreading the good word about sleeping on air..." The two perforated savings coupons attached to the bottom of the letter are personalized with the customer's name and the closest retail location that sells Select Comfort mattresses. A registration number also helps Select Comfort track sales from any channel.
A small, four-color brochure with detailed product and financing information is included for customers to give to friends along with a coupon. Werner says that he's tried mailings without the brochure, and they didn't pull as well.
While these campaigns don't give customers any extra incentives to recommend Select Comfort mattresses to others, Werner says that it's not necessary to do so when the product itself is the best incentive. He explains that the main motivation for any pass-along is simply a good product.
"We're just helping the ball roll down the hill," he says.
Each campaign typically runs for about a month, and one of the most interesting parts of the analysis is that half of the response to the coupons comes from customers buying for themselves, and the other half is from referral buyers.
Another significant finding is that most customers will steer their friends and family members to the same channels that they used to buy their Select Comfort mattress. Still, Werner likes to provide prospects and customers with retail, phone and Web response options in all the mailings.
Werner says that so far, response has been solid and the ROI is very strong for the referral campaigns. He even finds that mattress owners will call Select Comfort and ask when the next referral mailing is coming, because they have a friend to whom they want to give a discount coupon.
You can't ask for much more.