Market a DVD Shop with 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:
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.
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.
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.