CASE STUDY: Retailer facing stiff competition
The situation:
Jack was facing serious competition from supermarkets taking his market share, through cheaper offerings and convenience (one of the previously key attributes of smaller retailers!) He has a superior product range and niche point of difference with a solid client base regularly purchasing from his shop. Up until our engagement, a fair amount of marketing spend was on mass advertising - yellow pages, local newspapers, etc - with no real success. Most of his growth had been achieved organically, through word of mouth.
What we did:
After a review of promotional spend, we reallocated budget to use as promotions for existing (and later new) clients. After conducting a qualitative survey of clients and establishing the client database (and based upon the analysis of the research) we thanked everyone for participating and created a "draw" rewarding one lucky client with a trip for two to the Gold Coast for a week. A loyalty program was launched with the opportunity to win another trip in a few months for every completed card. The rewarding loyalty strategy was instrumental in countering stiff competition from larger retailers with economies of scale (also indicated through the survey, as 67% of the respondents stated they also purchased elsewhere.)
The outcomes:
With no increase in marketing spend, Jack now has increased the average sale value over 50% (through the loyalty program), leveraged the loyalty of existing customers and created significant word of mouth promotion in the community through providing the trips to the Gold Coast every six months. Sales revenue is up 26% from last year and quarterly promotions to the database have also encouraged increased sales through new products and added value promotions.
