Database Power Sports Marketing: Using Point-of-Sale Data to Improve Profitability

By David Carleton

Not long ago I made a trip over to the local Radio Shack to purchase an electronic plug for my cassette recorder. As I paid for my item the retail clerk asked me for my name, address, telephone number, birth date, and even my email address (something every retailer should be asking for today!).

Although I felt a twinge of discomfort giving out my personal information, I went ahead and gave it to him and went on my way.

Driving home I reflected on Radio Shack’s checkout process and was reminded of the power of information gathering at the point of sale. I had just given Radio Shack three ways to contact me, not to mention, information on what I had purchased. In the hands of a skilled marketer, this information is powerful.

Database Marketing

The recent economic slowdown has brought increased competition to the ATV industry. And with that, dealers across North America have described their sales as "flat." Power Sports Dealers should be looking for low cost, high impact marketing activities to drive business to their stores.

One of the most effective and cost-efficient ways to add profits to the bottom line is the use of database marketing, which uses information collected at the point-of-sale.

Using personal data, purchasing data, and contact information from a customer database, an Power Sports dealer can make offers to customers for complimentary products and services and engage in loyalty marketing activities.

Database marketing has four key elements, (1) gathering customer data, (2) building a customer database, (3) creating targeted offers for specific customer groups, and (4) tracking results to improve responses.

Step 1: Gather customer data. The easiest way to begin this process is to develop a simple form for customers and salespeople to fill out every time a customer purchases a product or service. Include personal information such as names of spouses, children, profession, and birthdays, as well as, product information such as manufacturer, make, and model.

Step 2: Build a database to store your customer information. Start simple using off-the-shelf software such as Microsoft Access. Later on you can begin to modify the database to either include different types of information or to print special reports.

Step 3: Start sending offers and personal messages to your customers. Don’t wait until you have a large mailing list. Begin sending notes to customers right away thanking them for their purchase, to celebrate birthdays, share holiday messages, and inviting them to come in and take advantage of special offers.

There is an old saying that goes, “Business goes where business is invited, and stays where it is appreciated.”

A personalized invitation to drop by the store to take advantage of a specific incentive is sometimes all that is needed to keep your customers coming back into the store. Instituting a program of personal, hand-signed notes that coincide with birthdays or special events addressed to the customer's significant other that offer gift ideas, can have surprising results.

Step 4: Track the results of your database marketing efforts. By knowing who you sent offers to and who responded will help you identify your best customers, allow you to more effectively allocate your marketing dollars, and help you tweak your marketing pieces to get higher response rates.

What Information Do I Collect?

It’s important to determine in advance the type of information to collect. To do this, make a list of common special offers you might be presenting to your customer.

If your customer has older out of the house children, consider presenting follow-up offers for products targeted for them. Imagine being a consumer and receiving a letter from your Power Sports Dealer with an enclosed birthday card for Joe Jr. who just turned 23 years old and a discount offer for a new ATV.

Collecting Accurate and Consistent Information

Database marketing all starts at the point of sale. Without accurate, complete, and consistent data this type of pinpoint target marketing can’t be done. To ensure that your information is accurate and consistent, help your customers fill out the data collection form and review each information form for completeness.

You might experience a hesitancy from your customer to give out all their personal information, similar to how I felt at Radio Shack. However, after explaining that the information will only be used to send out special offers during important events, is completely confidential, and will not be shared with anybody else, you’ll find that most of your customers won’t have any problem giving out their personal information.

Cost Effective Loyal Customers

Marketing to your current customers is one of the most effective and cost-efficient strategies you can do to reduce your marketing costs, enhance your customer / retailer relationships, and produce long-term loyal customers who, over a period of months or years, become your biggest source of referrals.

Conclusion

As you track your ads, keep the best pulling ads as your “control” piece. Vary the different elements of the ad to determine if your new ad pulls better than your control ad. If it does, make that ad your new control ad.

Although, none of these elements alone can guarantee a successful ad, the combination of these elements will increase the potential for your ad to be a solid winner.

About the Author:

David Carleton is the CEO of Power Sports Success and the Senior Editor of the "Power Sports Success eNewsletter." To get your free lifetime subscription visit http://www.PowerSportsSuccess.com

To your success.