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The best data come from your customers themselves. Many of them will be glad to give you information for free. In the past, sending survey forms to customers by direct mail and receiving direct-mail responses was a very expensive process. Only a small percentage of customers (usually less than 7 percent) would respond to such a survey. When they mailed in their survey forms, the data from these forms had to be entered into a database by hand. The cost per completed survey was substantial, as Table 14-2 shows. To justify this expenditure, you had better have a very profitable marketing project.
| Amounts |
---|---|
Requests sent | 200,000 |
Cost per request | $0.60 |
Cost | $120,000 |
Response rate | 7.0% |
Responses | 14,000 |
Return postage | $0.80 |
Data entry cost | $0.35 |
Response cost | $16,100 |
Total cost | $136,100 |
Cost per survey | $9.72 |
All this has changed with the advent of the Internet. Today companies make survey forms an important part of their Web site. They encourage people to come to the site and complete a survey form. The costs are dramatically different. Assume that you already have a person’s email address. You ask that person to complete a survey by email, directing him to your Web site. When he gets there, he does all the work.
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There is no data entry cost. A Web response customer profile will cost you about $0.57, as shown in Table 14-3.
Amounts | |
---|---|
Requests sent | 200,000 |
Cost per email | $0.04 |
Cost | $8,000 |
Response rate | 7.0% |
Responses | 14,000 |
Data entry | $0.00 |
Data entry cost | $0 |
Total cost | $8,000 |
Cost per survey | $0.57 |
Why would customers want to give you this information? You have to come up with some good reasons, or they won’t do it. One way to get them to do it is to call these surveys preference profiles instead. The benefit to the customer is that you will use these preference profiles to provide customized service just for her. Figure 14-5 gives an example of a preference profile.
Figure 14-5: Disney Survey
Figure 14-6 shows how Macy’s asks for profiles. Why should you register with Macy’s? Figure 14-7 tells you why.
Figure 14-6: Macy’s Survey
Figure 14-7: Reasons to Fill Out the Macy’s Survey
While visitors to your Web site are filling out these surveys, you can ask them their age, income, marital status, and so on. The information you get will be far more accurate than appended data.
Having customers fill out preferences profiles does more for you than just provide information. It will change the behavior of your prospects and customers. Once they have invested their time in filling out your profile and have thought about the types of services they would like to receive from you, they will think differently about your company. They will be more responsive to your next offer, whether it is a direct-mail, email, print, TV, or radio offer. You have moved them one step closer to being profitable customers. You can prove that to your satisfaction by comparing two groups of similar customers. To one group, you send an email offer to complete their profile. To the other group, you do not. Table 14-4 shows an example of the results.
| Test | Control |
---|---|---|
Customers | 200,000 | 200,000 |
Not completed | 186,000 | 200,000 |
Annual sales | $4,836,000 | $3,200,000 |
Sales per person | $26 | $16 |
Completed | 14,000 | |
Annual sales | $1,512,000 | |
Sales per person | $108 |
If you look at this table, it is clear that those who completed your profile turned out to be much better spenders than those who did not. This does not necessarily prove that the profiles were worth it. Maybe the people who filled out the profile were better customers to begin with. But why did the nonresponders who were asked to fill out a profile buy more than the people who were not solicited at all? Because you communicated with them! Communicating with customers always improves relations and sales—sometimes not as much as you would hope, but always more than noncommunication. So if you want to determine the true result of your profiling operation, don’t just look at the performance of the responders. Use a control group to see if the nonresponders also do better. They will. Figure 14-8 shows the kind of information that the New York Times gets from its readers on the Web.
Figure 14-8: New York Times Survey
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