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Create Code 39 in Software Copyright 2003 by Arthur Middleton Hughes. Click Here for Term of Use.

Copyright 2003 by Arthur Middleton Hughes. Click Here for Term of Use.
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the customer s attention on the wrong thing: the price of the product instead of its quality and the service you offer. Finally, we cannot assume that every acquired customer is good for the rm. Fleet Bank discovered that half the customers it was acquiring destroyed value and would never be pro table for the bank. There are dozens of acquisition methods, several of which are covered in case studies in this chapter. In general we can summarize them as follows: Mass marketing through TV, radio, and print ads. With generaluse products and packaged goods, mass marketing is far preferable to direct marketing for customer acquisition. Of course, to acquire customers through mass marketing, you have to have a method of capturing customers names, addresses, and email names when they buy in retail stores. Without this step, you have sold product, but you have not acquired a customer. Creating pro les of your existing customers, then renting names of prospects who resemble your pro table customers. Exchanging customer names with other businesses. The catalog industry uses this idea extensively. It works very well. This is contrary to the idea that is prevalent in the rest of the world, particularly Europe and Japan, that customer names are a corporate asset that could be ruined if the company were to allow them to become known to any outsider. Renting customer names has become a pro t center in many companies and, as such, is a positive good to the direct marketing industry. Providing a method by which customers can register with you when they buy a product. This is done for computers and software and for many electrical products. Millions of people willingly register. The best method in use today for getting people to register is through a Web microsite that you set up speci cally for this purpose. The site should be listed on the product packaging or on the product itself. Providing a reward helps. Determining which clusters your consumer customers come from and seeking additional customers in other households located in those clusters.
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Doing penetration analysis by zip code or SIC code and nding out where you are strong and where you are weak. Armed with this knowledge, you can better direct your acquisition strategy. It is easier to sell in areas where your name is a household word than in areas where you are unknown. Giving customers an incentive to provide you with referrals. As we will show you, referred customers are better than the average customer and are worth cultivating.
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Table 13-1 gives a simpli ed example of a penetration study for a company that sells to several industries. The company has 29,000 customers, roughly divided into four sectors. As you can see, most of the company s sales come from light manufacturing. The companies with the highest lifetime value are in heav y manufacturing. But the high-technology sector is particularly interesting. The U.S. universe comes from Dun & Bradstreet data. It shows the number of companies in the SIC codes that Weldon sells to. As you can see, Weldon s penetration in the high-technology sector is very high: 42 percent. This means that Weldon is a household word in this industry. It will be much easier for Weldon to pick up an additional customer in this sector than in any of the other three because it is so well known there. This shows the power of penetration analysis. Table 13-1 Penetration Analysis
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Weldon U.S. customers universe Metal production Light manufacturing Heavy manufacturing High technology Total 254 15,442 44 612 29,198 2,433 162,009 1,288 1,453 167,183 Penetration ratio 10.44% 9.53% 3.42% 42.12% 17.46% Lifetime value $145,067 $5,914 $988,145 $127,675 Target potential $15,144.68 $563.70 $33,756.51 $53,776.39 Rank 3 4 2 1
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