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How to Market a DVD Shop Using a Referral System


The high setup cost of a small dvd store, coupled with competition from existing shops, make it difficult to survive the first six months. This is when your marketing strategy can mean the difference between success and failure.

The idea is not to attract customers once, but to have them return and refer others to your shop. It works great when you introduce it as part of your opening special at a new location. It can, however, also save an existing business with a too small client base. Clients receive an incentive to provide their contact information as well as the contact information of three other persons. The incentive can take the form of a voucher or 50% discount to both the referrer and those clients that come in and purchase or become members because of a referral. You only need five initial customers to build a large client base within six months.

Let's have a look at the process with an example of the dvd shop:

Referral system

First time customers at normally have to complete registration forms with their contact details, identification numbers (South Africa) or social security number (USA). They also have to provide contact details of at least two other persons not staying with them. The message is: "We don't trust you!" You create a positive attitude towards your shop by turning this process into a marketing tool.

How does it work?

The client comes in and completes the form to register as a new customer. You provide an incentive for three references. You advertise that for each one of the referrals that comes in to register as a new customer and rent one category or new video, you will give the referring client one credit for hiring from the latest releases. Each referred customer that comes and register, will also be able to hire one movie for free with the first rentals.

You use the contact information: telephone number; mobile phone number; facebook, address and email to check the references, but at the same time, inform them that Mr. X has referred them and they have won a free movie voucher. They can redeem it when they come in to register or when they register on the Internet and make their first rental.


If 5 customers each provide 3 references, your business contact list will grow in the following manner:

5 x 3 = 15
15 x 3 = 45
45 x 3 = 135
135 x 3 = 405
405 x 3 = 1215
1215 x 3 = 3645

You now have 3645 referrals, but in total have 5465 clients that you can contact via email, telephone or SMS to market great specials, events and give-aways. If only half of the referrals also register, you will still have a large client base within a short period. Use technology to take advantage of these referrals.

Place large posters inside and outside your store to advertise this. Don't keep it a secret! Make use of the Internet, emails and SMS system to contact the referrals and advertise it. You want them to return for more! This is where your email newsletter and SMS system comes in.

They receive a club card that entitles them to one free movie for every ten movies rented and can continue to provide referrals to receive even more free movies from your shop. Email or SMS the clients every time you get new stock. Make the latest movies half price for the first week and advertise it in your email or SMS. They can book the movie online via your website and pay with a credit card or just have to rush in and make use of the special.

Competitions

You can also have regular movie review competitions on all your stock. The person who rents out a movie can write a review on it. This is placed on your website or Facebook page where your users can read reviews and make informed decisions on what movies to rent. You select the best movie review each month and that customer gets four free movie tickets.


Have a weekly competition with three questions on movies. If they answer it correctly, their names go into a box. You have a draw at the end of the month and one person stands a chance to win a free movie rental.

Build Profiles

Another way to use technology to your advantage as part of your marketing strategy is to let your customers complete a profile form in store or online. It contains their birthday dates as well as that of their spouse and children. SMS or email a birthday greeting to them with an invitation to rent a movie for free. Most of them will come in to rent more than the free movie. These are just some tips on how to build a loyal customer base in-store. You can apply the same principles to other retail outlets. Good luck!


Isebell Gauché

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