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Staying in the Game

Dave Ratner//January 5, 2015//

Staying in the Game

Dave Ratner //January 5, 2015//

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By the time you read this Christmas will be over and the fabulous week between Christmas and New Year’s Day will also be in the books.

I did something this year that we haven’t done in a few years. We sent the top 20 percent of our customers a postcard that simply said thanks for being one of our best customers.

It also include a $10 gift certificate towards anything in the store. No catch, no minimum purchase, just present this postcard and get $10 off any purchase.

The postcards hit the homes the Monday before Thanksgiving and were good through Sunday Dec. 7. I wanted to keep the offer to two weeks and have it end before the days when we do get busy for Christmas.

If ever there was a group of customers I want to make sure I never lose, it is the top 20 percent.

As I told one of my customers, it is such a great feeling to be able to reward the folks who spend so much money in my stores. My guess is that we will get a 60 percent response on the postcard.

Now, the reason I ended the offer on Dec. 7 is so that these customers would come back right before Christmas when they were really in the Christmas mood. I don’t know about you but our business is usually soft the last week of Thanksgiving and the first week of December. This promotion really made the registers sing. Of course the bad news is we gave thousands away in discounts. I kept telling myself, aren’t you happy to give a person who spends $400, $500 or more a year in the store $10? You bet I was.

I am thinking for Valentine’s Day we will send a similar postcard—maybe $5 to everybody who spent more than $250 or $300 last year. Again, February is a pretty slow moth for us and this will be a huge lift. We have done it in years past and will get about a 30 percent response and the average transaction of the folks who use the gift card will be way higher than usual.

I also learned it does produce an added visit to the store so even though it is a huge investment, it pays off.

One of the bad parts is you can’t get vendors to kick in anything since it is a gift card. What we do is take all our specials off for the month so our margins aren’t clobbered.
Speaking of margins, we are just about to upgrade our POS system and are trying to adjust all our pricing in the system before we flick the switch. We now have two price points, $.49 and $.99. So if an item costs $2.10 and we double the item it used to be $4.19, now it will be rounded off to 4.49. If the item costs $2.30, it used to retail for $4.59 it is now $4.99. These are nickels and dimes but at the end of the year it is a lot of nickels and dimes.

One of the things I am most excited about with our POS upgrade is we will have the ability to do email receipts. Plus, the emails can have targeted messages and offers on them and will mobile-friendly emails.

Have you ever noticed the receipts from your grocery store or CVS or Walgreens? Next time you shop in one of the big chain stores look at what you bought and see if there isn’t a coupon from a competitor product and or a similar product to what you bought. If you bought cough syrup, chances are there are coupons of cold and flu products. I can’t wait to sit with my vendors and come up with all kinds of offers like those. Think about it, if the customer buys a brand of dry food, put a coupon on the receipt for that brand of can food or treats. If a customer buys puppy food put a coupon for training pads or stain remover. Really, the sky is the limit on this one. It’s also an easy way to capture customers email addresses.

Another thing the new system will allow us to do is something I am dreading but I know I need to do. We will build an e-commerce site so customers can order anything we carry in the store online at the same price as in the store. It will be huge task but I think a necessary one. We will offer the same delivery terms as Amazon and the pet e-commerce sites but we will only market our site to our geographical area. We will not pay attention to online prices; we will mirror what is going on in our stores. That way, we won’t have to hire folks to shop other sites and constantly change prices.

You know as well as I do that we are losing sales to e-commerce sites, not to mention manufacturers who are now selling directly to consumers. In order to compete and to continue to thrive, I really think we brick and mortar stores will have to be in the delivery business as well.