As customers make purchases they reveal what they like, enabling Whitney to better target them in the future
IT USED TO BE REAL EASY to find the recent owners of a Ford truck. Or a 1974 Volkswagen Super Beetle. Or a 1995 Jeep Wrangler.
But with the enactment of the Shelby amendment last year, data on buyers of specific vehicles evaporated virtually overnight, taking with it the names of 300,000 prospects a year for automotive accessories marketer J.C. Whitney Inc. As a result, the company curtailed its annual catalog circulation — normally 40 million — by 5%.
And Whitney has begun to capture the data on its own.
While the hundreds of thousands of lost names made up only 8% of the 5 million prospects the firm mails each year, the loss of that quality motor vehicle registration data was devastating. “That was a very efficient 8% because it was so highly targeted,” says Ed Bjorncrantz, who recently resigned his position as Whitney’s vice president of marketing after more than four years. “It’s much more difficult to conduct business under these restrictions.”
This year, the company dramatically increased marketing efforts to generate catalog requests by driving customers to its Web site or call centers, where it can capture data on motor vehicle owners, says president Tim Ford. Whitney’s budget for magazine space was bumped up 40% for ads aimed at accomplishing this. At the site (www.jcwhitney.com), the catalog request box was moved from the lower left to the more visible upper right corner. And more vehicle affinity categories were added to the registration area where customers sign up for the company’s e-mail newsletter. The combination of the increase in ads and upgrades at the site have boosted online catalog requests by 30% over last year.
Customer service reps at the telemarketing operations were trained to gather vehicle information from every caller.
The LaSalle, IL-based company also launched two new specialty catalogs this year.
“Based on what they request, we now know their affinity,” Ford says. The company offers catalogs for owners of Chevrolet, GMC, Dodge and Ford trucks and SUVs, Volkswagens, motorcycles and Jeep vehicles. It also has a general interest book, Everything Automotive.
In March the company rolled out the Sport Truck catalog to a slighter younger audience than its usual one. The typical customer is a 30- to 50-year-old married homeowner with four vehicles parked in his garage and a household income of about $55,000.
It also tested the Sport Compact catalog in late 2000 and debuted it earlier this year with a 300,000-piece mailing. The 52-page four-color book targets a vastly different market segment: an 18- to 25-year-old ethnic, highly mobile hot rodder, Bjorncrantz says.
Six specialty shops have been set up at the Web site as companions to the catalogs. They feature products and information as well as prominent placement for catalog requests.
Prior to enactment of the Shelby amendment, Whitney had relied on mega compiler Polk, now part of Equifax, for its vehicle affinity data. Currently it uses Equifax and Experian to enhance its newly captured data with demographic, lifestyle and multicatalog purchase information. It also taps male-oriented catalog files, using list selections like multiple vehicle ownership, home ownership and average income in its search for prospects.
And while the company has been able to replace the data — although not at the same rate — the costs are much higher. So Whitney has had to cut back its catalog prospecting by 2 million this year, a drop of 5% over last year’s annual catalog circulation of 40 million, Bjorncrantz says.
“If you’re not generating any new purchasers, the data ages very rapidly,” says Bjorncrantz, who has joined consulting firm The Callahan Group in Rosemont, IL. “You have no new names coming in. You’re just dealing with a file that’s aging. Vehicles are being sold, transferred or scrapped. The turnover is fairly high.”
He says costs have increased because the acquisition process is now two steps instead of one. Instead of just purchasing the names for $100 per 1,000 names and mailing the catalogs at a carrier route rate, the company has to generate the requests through advertising and fulfill the orders at the more costly single-piece rate.
“The costs are significantly higher,” Bjorncrantz says.
The company must also now rely on potentially less accurate self-reported information vs. registered data. “You have more Lamborghinis and Maseratis that may exist in the United States,” he adds.
However, Ford says, the quality of the company’s file has improved. As customers make purchases they reveal the kinds of products they favor, enabling Whitney to target them with the right catalogs and products in the future. Whitney is also exploring other options to increase data collection, such as inserting blow-in cards in its catalogs.
Sen. Richard Shelby (R-AL) tacked his privacy amendment onto an existing transportation appropriations bill signed into law in October 1999 and access to driver’s license data basically disappeared. The amendment requires that states obtain written permission from licensed drivers before making personal information available to third-party marketers. States that didn’t implement the system by June 1, 2000 faced the loss of funding by the Department of Transportation.
“The Shelby amendment was designed to protect consumer privacy and what’s happened is it’s denying customer choice,” Bjorncrantz says. “If I can’t identify you as a Jeep Wrangler owner and you want to buy a top for your Jeep, you’re going to go through the dealer and spend twice as much as you would by going to J.C. Whitney.”
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