When it comes to conservative, traditional business, there isn’t much beyond a men’s clothing store, especially an upscale one.
But being a traditional business doesn’t limit you to traditional means when it comes to building relationships with your customers.
Just ask Mike Culwell, president of Culwell & Son, a Dallas-based clothier. Two years ago, he decided that e-mail might be a good way to reduce his direct mail costs while keeping in touch with his customers. He already had a Web site that had posted moderate success, but didn’t want to put any more resources into a Web strategy that had limited potential for returns.
“I spent a lot of money creating a four-color brochure, then having it printed and distributed through conventional mail,” says Culwell. “I was trying to figure out a way to use technology in a traditional business. I discovered that almost every one of my customers has e-mail.
“If I could get their addresses, I could still get in contact with my customers and not incur the printing expenses.”
Culwell collects e-mail addresses from customers when they make a purchase. He offers them a $50 gift certificate mailed to them on their birthday if they consent to give their e-mail address.
“It’s a nice hook, but you have to have something to give them,” says Culwell. “The customer is letting you put messages on their computer. We’re going to save money by not having to mail to them.”
It costs Culwell $1 to send someone a direct mail piece once all the production and mailing costs are added up, as opposed to five to 10 cents per e-mail. But the process ended up being more complicated than he first thought.
“I started out using a traditional Eudora mail program, but it was clear after I got 300 to 400 names that this just wasn’t going to work,” says Culwell.
After experimenting with other programs, he opted to bring in E2 Communications, an e-mail marketing company, to handle the technology side of the e-mail program. The company now sends out full color e-mail in HTML format.
“Since then, we’ve been adding about 1,000 names per month,” he says. “We’re still doing the creative end of the production, we just skip the printing and mailing expenses.”
Lower expenses means increased number of mailings. Culwell does an e-mailing every two weeks or so; in the past, he could only afford a quarterly mailing. Of his customer list containing 20,000 names, he has about 4,000 e-mail addresses.
“Our goal is the entire file,” says Culwell, who is still doing printed pieces for the 16,000 people he doesn’t have e-mail addresses for. “Our goal is e-mail only, and we’re in a transition phase right now. I’m really pleased and excited with the results we have so far.”
Culwell has tested the effectiveness of e-mail by using it as the only means to promote special events and sales to his customers, and has received good results.
“We can also respond so much faster,” says Culwell. “We can literally get a new product in, have it photographed and put in a nice HTML piece in a day. In the past, using the traditional printer, we would have to wait 10 days to have it printed, then send it bulk mail, which might take another 10 days to get there.”
Customers can ask questions via the e-mail they receive, giving them a convenient way to gather more information.
“So far, the volume of replies is such that I can handle most of the questions, which are typically, ‘How long does the sale run?’ or ‘Does it come in a certain color?'” says Culwell. “I was concerned there would be a more negative response about getting more e-mail, but everyone consented to receive this. I get a lot of thank yous — a lot are just thanking me for keeping them informed.”
To collect more names, a brochure or card encouraging customers to register their e-mail address is put in the bag with every purchase. In addition to the $50 certificate for their birthdays, customers receive $25 off on their next purchase of $100 or more, so there is a large incentive to sign up.
Culwell knows that he’s only scratched the surface of how he can use his customer data combined with the instant contact e-mail allows.
“It can be overwhelming at times, and we’re not to that point yet, but we are starting to look closer at our customer profiles and their buying habits,” says Culwell.
In the future, if the store is overstocked with size 42 regular suits, he could harvest all the customers who wear that size from his database and send them special offers. If a customer buys one particular brand, that brand could be promoted to him.
“We’re not a mom and pop business,” says Culwell. “We have 100 employees with $10 million in revenue. We really thought that once our Web site was up with the catalog, things would really get going. But it kind of got lost in cyberspace. What we’re finding out is that where the technology is best used is to hold onto current customers and bring them closer to you. We are building within that area and driving business to our storefront.
“We really surprise our customers with the level of sophistication in our e-mail. They are really shocked that their homegrown local merchant is doing something like this. That really positions us well in our customers’ minds.
“They see us as progressive, and that is a collateral benefit.” How to reach: Culwell & Son, www.culwell.com; E2 Communications, www.e2communications.com
Todd Shryock ([email protected]) is SBN’s special reports editor.
