Reverse Phone Matching

In the absence of a registered credit card to identify their customers—and because it is often more effective—many retailers use reverse telephone matching to capture customer data. The Sports Authority, the largest full-line sporting goods equipment retailer in the United States, is a good example.

Retail sales are often driven by the calendar. People are in a buying mood before Christmas. The mood is entirely different a month later. The Sports Authority, which operates 198 full-line sporting goods superstores in 32 states across the United States, wanted to respond to existing and new customers in key markets during the busy holiday shopping season. Like most retailers, The Sports Authority gathered information about customers at the point of sale. However, by the time information on a customer made its way to the company’s marketing department for use in follow-up or promotions, at least a month had elapsed. To capture repeat business before the 4-week holiday season ended, Jeff Handler, senior vice president, advertising and marketing, challenged the company’s customer relationship management (CRM) software vendor, Harte-Hanks, to shorten this time to 1 week.

The goal was to identify the customers, and then, using print-on-demand functionality, react to those customers with an appropriate direct-mail offer, all within 1 week after any store visit. Few retailers in America have ever accomplished such a feat. The Harte-Hanks customer contact strategy, dubbed “Retail Daily Sales Builder,” involved analysis of point-of-sale data, interaction with the full customer database, and creation of customized marketing communications.

The Sports Authority centers its holiday promotions around the first week in December. For this program, The Sports Authority focused on its in-store customers, as opposed to Web or catalog customers.

The Objective: Repeat Business

To make the most of the holiday season, The Sports Authority uses both mass marketing and targeted, focused direct mail to bring shoppers into the stores in December. Retail Daily Sales Builder was designed to cost-effectively bring customers back one or more times before Christmas, a time period when repeat business may be difficult to achieve because customers have many choices. Without special incentives or relevant messages, they may not return to stores where they have already spent money for some of their holiday purchases. The key is to provide compelling offers in a timely manner. Without a truly sophisticated system, compelling and timely offers are not possible. The Sports Authority’s goals were to get a printed, customized direct-mail piece into customers’ and prospects’ hands within 1 week following a store visit, and to reward early purchasers during the holiday season

The most difficult elements of the project were getting the program in place by November 30, given that the starting point was early November, and then being able to quickly turn around a second offer to customers and prospects. Part of the process involved matching the in-store customers to their mailing addresses. The team used a reverse telephone number appending process. Each clerk at each point-of-sale station captured the buyer’s telephone number as part of the transaction. Every night, these data were transmitted from each of The Sports Authority’s stores to the central database, where the phone numbers were matched to mailing addresses using reverse appending. With its Retail Daily Sales Builder process, The Sports Authority and the Harte-Hanks team were able to do that within 1 day of the purchase. Many of the names and addresses were already in The Sports Authority’s customer database. Other names and addresses came from rented telephone appending lists.

The Offer

The day after any purchase, Harte-Hanks was able to identify the name and address of almost every person who had provided a phone number the day before. It was then able to print a targeted direct-mail certificate and mail it so that it would arrive in the shopper’s mailbox within 1 week of the shopper’s visit to the store. The project started in November with the mailing of a holiday gift guide to all existing retail customers near each store. In certain key markets, there was some targeted prospecting as well. People who made a purchase based on the gift guide would receive a second standard postcard offer within 1 week.

The Sports Authority says that approximately 5 percent of the shoppers who received the initial gift guide came to the stores and used the certificates included in the guide. The follow-on mailing to anyone who responded to the first holiday mailer had double-digit response rates, essentially tripling the industry norm for response rates and, most important, bringing those customers back to shop again before Christmas.

Why did this program work? Because of its recency and a solid offer. The customer who is most likely to respond to any promotion is the customer who has made a purchase most recently. The increased sales were so significant in comparison to the cost of the program that The Sports Authority made it a permanent part of its marketing program.