With a new point of sale computer system, a drycleaner had the tools necessary to analyze his customer database.  He wanted to know what percentage of customers contributed what percentage of sales.  Next, he wanted to learn about his best customers and develop plans to increase sales by attracting more customers just like his current best customers.

After exporting the database from the point of sale system to a format that could be manipulated and easily analyzed, the cleaner was shocked at the first finding.  The top 50% of his customer database provided over 92% of his annual sales.  From this analysis, he also discovered that the majority of his customer retention marketing was aimed at the customers in the bottom 50% of the database and they weren’t going to provide any significant impact on sales even when they were retained as customers.  After learning this about his customer spending habits, he realized an offer was being made to retain customers who would most likely remain customers without any marketing effort; they just didn’t have a need for his services.

The next step was to compare the top 10% of the database that provided almost 60% of annual sales to a national database to develop a lifestyle profile.  Several large database management firms, such as Experian and Acxiom, provide Match Rate Reports or Customer Profile information.  The resulting report provides information about a customer’s car preference, education, investment types, hobbies, job type, music preferences, children, contribution habits, and reading preferences.

Careful interpretation of the data was required to merge known demographic characteristics of the customer base with the new lifestyle information.  Once that data was interpreted and assembled, a mail list of prospects was purchased.  Theoretically, the prospect on this list should have comparable lifestyles to the best customers in the database.

One lifestyle characteristic common through the customers was the pride taken in their automobiles – European luxury cars or sensible sedans – Mercedes, BMW, Audi, Volvo; and the second vehicle was a minivan or SUV.  In addition to a rich drycleaning and laundry offer, arrangements were made to give the new customer the best detail job at a popular local car wash after their third order.

The direct mail series consisted of 1 letter and 2 post cards mailed one month apart – a classic 90 day campaign.  Results were phenomenal - 14.72%.  Considering the fact the Direct Marketing Association’s standard return rate is .5-1%, results far exceeded expectations.  Better yet, if these customers are like the top 10% of the customers as profiled, estimated annual sales will increase by $109,600.  Not a bad return for a total investment of $13,500.

All of this is a result of knowing and using an existing customer database.