FollowUp.net

Virtual Retailers Lack Tools To Cultivate Consumer Relationships

FollowUp.Net poll reveals a gap between what cyber-merchants recognize as best practice and their current skill sets.

Westport, CT - June 28, 1999 - Despite a rising consciousness about the importance of loyalty marketing, seven out of ten online retailers lack operational strategies for cultivating their all-important customer relationships.

A new poll of virtual store executives reveals that 26% of operators have no customer relationship development plan. Nearly half (45%) perform their customer development programs on an ad hoc basis. That leaves 29% who are actively pursuing consistent, multi-step programs for developing customer relationships.

The Customer Development Survey, conducted among a cross-section of online retailers by FollowUp.Net (http://www.followup.net) here, revealed several additional key findings:

1) Many online retailers recognize that attitudinal data is even more effective than transactional data for segmenting their customers.

2) Yet, 25% of online retailers perform no customer segmentation. Among those that do, just one in six (14%) uses attitudinal information to segment customers.

3) A majority (58%) of responding cyber stores sends out untargeted sales promotions.

4) Two-fifths (42%) of responding cyber stores send out untargeted newsletters.

5) Most virtual retailers recognize the importance of knowing customer behavior and preferences, but few have the skills or resources to acquire such information.

"Virtual stores have a significant opportunity to develop targeted customer communications," says Chris Woods, CEO and founder of FollowUp.Net, an innovator in Internet database marketing tools. "Those online retailers who swiftly integrate segmentation and targeting capabilities into their day-to-day operations will enjoy a strategic advantage versus their competitors." To be most effective, online marketing programs must incorporate both segmentation of the customer base and subsequent targeting of messages, Woods said.

To be most effective, online marketing programs must incorporate both segmentation of the customer base and subsequent targeting of messages, Woods said.

"The good news is that 79% of respondents send out email newsletters to their customers, but only half as many (39%) say they target those newsletters to specific customer groups," he said. "Similarly, 58% of respondents send out email promotions, while fewer (42%) target those promotions to specific customer groups."

In a sign of how far they have yet to go, only 13% of online retailers indicated that they engaged in "permission marketing," and even fewer (10%) said their sites used "one-to-one" marketing techniques. While both tactics are currently in vogue, practical tools for executing against them are hard to come by.

"Ultimately, the highest goals for online marketing are to generate repeat purchases and to foster customer loyalty," Woods said. "Our poll indicates that most cyber retailers understand that such activities should bring better returns than efforts to attract and convert new customers."

The gap between that understanding and execution of quality customer segmentation and targeting represents a strategic opportunity for leading cyber merchants, he added. "The process begins with monitoring consumers' online activities and systematically collecting attitudinal, behavioral and demographic data. Ultimately, repeat purchases and consumer loyalty will separate the winners from the losers in the online marketplace."

FollowUp.Net is an innovator in online Customer Loyalty Development applications based in Westport, CT. The company provides a complete marketing solution designed to turn a first time shopper into a repeat and loyal customer. Its web-based application suite includes SurveyTrakker, ProfileTrakker, PulseTrakker, WarrantyTrakker, CallTrakker, and PurchaseTrakker.

Note To Editors: Charts from the FollowUp.Net.net Customer Development Survey are available in PowerPoint format at the company's home page, http://www.followup.net. They will also be faxed upon request. Company executives are available for interviews at the number above

The FollowUp.Net Customer Development Survey was conducted among virtual retailers during June 1999 using a combination of email and telephone contacts. Users are cautioned: These data are results of a small-sample poll. Results may not be projectable.