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Speaking Directly: Understand customers by becoming one

The following column, which appears each issue, looks at new and emerging trends in direct response marketing. Alternating columnists are David Foley, a specialist in database marketing programs, and Fransi Weinstein, an award-winning creative director.

If you ever receive a mailing promoting the ‘Fresh-Herb-of-the-Month Club,’ it was likely invented just last month at the Marriott Marquis hotel in Atlanta, Ga.

Colin Tener, president of KnowledgeBase Marketing, a database marketing firm, and I found ourselves in the hotel’s bar, the day’s conference activities having concluded, discussing databases and marketing and whether the two words could really be joined into a single force that could leap tall buildings in a single bound.

Enter Joel Shaw, an interesting chap who sells vintage clothing at enormous prices, in town for the Produce Marketing Conference. As something of a sideline, Mr. Shaw also sells fresh herbs and specialty produce. Shaw, it seems, was recruited into the fresh herbs business by a friend in Mexico who grows same because of Shaw’s superior ability as a salesperson, although, for the record, he never tried to sell fresh basil to anyone at the bar that evening. Not once.

In the polite round-robin of conversation that followed, we learned much about the fresh herbs business – the vast array of products and the 400%+ growth in value between the field and the kitchen, for instance.

‘Why not test a Fresh-Herb-of-the-Month Club?’ we opined, in stereo.

‘A what?’ countered Shaw.

A detailed explanation of continuity direct marketing ensued, along with discussion about some of the key factors: margins, customer lifetime value, allowable acquisition cost, and so on.

Afterwards, we formulated a description of potential customers for the Fresh-Herb-of-the-Month Club: These are consumers who bought a container of fresh herbs within the last two weeks, bought again today and will buy again in another couple of weeks.

Furthermore, these individuals really do prefer fresh over dry (just as all the recipes suggest), couldn’t care two cents about the extra cost for the fresh product, entertain with flair and perhaps often, read Gourmet or Food & Wine, Eating Well, or The New Yorker, and because of the combination of all of these factors might (just might) be receptive to the idea of just-picked herbs immediately being packed into dry ice and delivered to their front door the very next morning.

At present, such people get their fresh herbs by trekking to the nearest quality grocery store, which is probably less convenient than home delivery. Furthermore, out-of-stocks can be a problem for such a highly perishable commodity.

In total, the potential benefits that a Fresh-Herb-of-the-Month Club could offer its members include the freshest products, guaranteed availability and convenient home delivery.

With the substantial difference between grower revenue and retail price and with the opportunity to create a spin-off brand specifically for the direct-order business, Fresh-Herb-of-the-Month Club may be doableor at least testable.

Of course, no direct-order enterprise should be launched on such informal research or an unproved hypothesis.

And, even though the Fresh-Herb-of-the-Month Club concept must be tested in order to develop a predictable financial model prior to any possible roll-out, another important activity would be to develop an understanding of other direct-to-consumer marketers in the same general category (such as Williams-Sonoma, Harry & David, and Gevalia Kaffe). Shaw could understand how they sell to their customers simply by becoming one.

As a recipient of their direct mail efforts (and by responding to some of them), Shaw – or anyone researching any potential direct order business – can learn much about the business, without risking anything or spending very much.

What’s more, it might also be fun.

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (416) 869-9736; fax (416) 869-3700.