Problems facing Vermont Teddy Bear’s call center, which handles both inbound calls and e-mail, evoke “Goldilocks and the Three Bears.” At peak times the number of orders coming in is too high for the company’s comfort; at off-peak times the sales volume is too low.
Through time-sensitive promotions, a loyalty program begun in April may engineer sales so the incoming level is always just right.
The program, PreFUR’d Members, offers discounts, promotions, a newsletter and product previews. By timing the offers to coincide with slower business periods, Vermont Teddy Bear will benefit as well. While plans call for everyone in its database to be targeted, the firm anticipates that ancillary sales will be generated from men, who tend to buy the plush bears on only a few occasions each year.
Vermont Teddy Bear has positioned its products as creative gift alternatives to flowers, and order patterns mirror those of the traditional “floral gift” holidays, such as Valentine’s Day and Mother’s Day. In the days leading up to these occasions, the company takes in around 40% of its annual orders.
Much of that is panic buying. “Our customers are men trying to get a quick, last-minute, thoughtful gift,” says media marketing director Irene Steiner.
In fact, two-thirds of the company’s customers are male, and they tend to make their presence known right before a major holiday. Women, on the other hand, often buy throughout the year, for events such as birthdays and new babies.
“Women are the key to a loyalty program,” says market research manager Michelle Cote. “They buy for more evergreen reasons.”
Using targeted messages to its PreFUR’d members, Vermont Teddy Bear hopes to ease the crunch created by holiday customers while building a relationship with them. Even a shift in order generation by a few days will allow the order-taking and fulfillment systems to process requests without going into overdrive.
But the program also will boost electronic orders, which the company handles more efficiently. Vermont Teddy Bear has added staff in its call center. Normally, the company maintains between 20 and 40 “bear counselors” to take incoming calls and verify online orders. This year, after an e-mail broadcast goes out, 200 counselors will be on hand. A good counselor can handle five telephone calls in 30 minutes. During the same period, a counselor can check 30 online orders.
The company’s initial outreach effort will test three messages. Some members will be offered free shipping while others will receive sweepstakes entries: On a specific date, all orders placed during one pre-chosen hour will be free. Still others will receive a reminder spotlighting two holiday-specific bears without an incentive. Each promotion’s effectiveness will be tracked.
Vermont Teddy Bear plans to segment its 250,000-name e-mail database, sending one of the three offers to each individual. The company will break down responses based on gender and purchase history. Future plans include analyses of peak vs. non-peak purchases and the amount spent.
The firm will use two tools from Burlington, MA-based Wired Empire to manage its loyalty marketing efforts. The first, Campaign Agent, will send test orders to customers. The other, Profile Agent, will create online surveys, sweepstakes and registration forms.
Vermont Teddy Bear will analyze all the permutations for their responsiveness, but customer service manager Lisa McGee expects the free shipping and handling offer to get the best reaction. “That’s the most common thing they ask for,” she says. “Repeat customers don’t ask for discounts as much as a break on shipping.”
The program marks the company’s first attempt at loyalty marketing. Two years ago, Web-based orders made up 7% of Vermont Teddy Bear’s sales. Nearly 33% of sales now come in electronically, a figure that jumps to nearly 50% at peak times and is expected to grow.
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