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Retailer's Response Rates Head North With
Prerecords
 DMNews, August 2004
By Scott Hovanyetz,
Senior Reporter, DMNews
Canadian clothing retailer Northern Group Retail Ltd. is using
prerecorded message campaigns in conjunction with its loyalty
program, adding an element to its marketing mix that has boosted
response rates.
Northern Group, Mississauga, Ontario, is seeing a lift in response
rates for standalone calls compared with test control groups that
did not get calls. This is in line with industry averages for
this channel, ranging from 5 percent to 20 percent in incremental
lift on average response rates.
The lift in response rates on prerecorded messages used with
direct mailers compared with direct mail alone generally ranged
from 5 percent to 20 percent and went as high as 38 percent.
Response rates have varied considerably by campaign and offer,
with some campaigns succeeding and others falling flat. ROI assessments
have found positive returns on campaigns overall.
Northern Group has been a client of SmartReply, Irvine, CA, for
about a year and a half. The retailer hired SmartReply to revamp
the telemarketing it conducted as part of its Northern Friends
loyalty program.
"Direct mail can get you so far," said Ryan Brown,
director of marketing for Northern Group. "This was an opportunity
to get in on an early adoption phase of a new technology that
allows you to stand out."
Northern Group operates 270 stores in Canada and is launching
eight stores in the northeastern United States. It promotes two
brands: Northern Reflections, a clothing line for women ages 35-55,
which it is preparing to rebrand in the fall; and Northern Getaway,
a specialty line for boys and girls ages 7-8.
Prior to the introduction of SmartReply, Northern Group relied
on in-store personnel, such as salespeople at retail counters,
to call customers in the Northern Friends program to alert them
to upcoming sales and promotions.
Prerecorded messages let Northern Group send a consistent message
in its telemarketing, Brown said. When using in-store employees
for telemarketing, the company had a difficult time presenting
the same script to each customer and monitoring the people making
the calls.
Tracking response rates also was tough, Brown recalled. In contrast,
SmartReply gives Northern Group daily updates on the results of
its prerecorded messages.
The Northern Friends database contains more than 1 million customer
records. It lets Northern Group track which customers received
calls and which subsequently made a purchase at a retail location,
enabling it to generate response statistics.
Northern Group had concerns about customer privacy when it began
the prerecorded messages, Brown said. To ensure it developed the
right legal framework, Northern Group and SmartReply worked with
the Canadian Radio-television and Telecommunications Commission,
which oversees telemarketing regulations in Canada.
The company weighed opt-in and opt-out options, Brown said. Northern
Group decided to let customers who receive the prerecorded calls
opt out of future calls by pressing a button on their telephone
keypad.
Northern Group aims to deliver the messages to answering machines.
In cases of live answers, customers hear a message informing them
that the call is recorded before getting a marketing message.
Northern Group uses prerecorded calls to alert customers of sales
or in-store events, for exclusive offers and as an advance for
direct mailers. However, Brown said he foresees using the technology
to respond to outside factors that could increase sales.
For example, if a snowstorm strikes in western Canada, Northern
Group headquarters in Ontario could rapidly deploy a prerecorded
message campaign to Northern Friends members promoting outerwear,
Brown said.
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