Tower Records Combines Print Catalog Plus Email Marketing: Sales Boost from 8% to 11%

According to a recent Tower Records test, an email campaign in
tandem with a print catalog mailing really works.

“We took the catalog that was going to about half a million
people, and we combined it with email,” says Russ Eisenman, VP
Advertising & Marketing for Tower Records.

The result? Depending on the offer, anywhere from a 1% to 3% lift in sales compared to the catalog-only group.

Here is how Eisenmen and his team developed the cross-media
campaign testing multiple coupon offers.

First the team divided their customer file into two basic
segments which they expected would perform very differently:
those who had made a purchase in the last 0-12 months and those
whose last purchase was 13-24 months ago.

Then each of the two groups was split into five sections, each
receiving a different test offer. The five tests were:

1) Catalog only
2) Catalog plus email offering no-cost shipping
3) Catalog plus email offering 10% off any purchase
4) Catalog plus email offering $5 off any purchase
5) Control group — no marketing whatsoever

The email creative showed the front cover of the catalog, and had
identical copy (a holiday sale message). The only thing that
varied was the specific special offer.
The groups were tracked by any activity through the call center
and online.

Results for Group One (0-12 month purchasers):

- Catalog-only = 8% response rate
- Catalog plus any special email offer = total of 11% response
for both campaigns combined

Results for Group Two (13-24 month purchasers):

- Catalog-only = 1.4% response rate
- Catalog plus no-cost shipping email offer = no bump
- Catalog plus $5 off email offer = no bump
- Catalog plus 10% off email = 2.5% total response rate for two
campaigns combined

Tower Records' next steps:

Tower Records has launched an insert program nationally in
newspapers, and will test an email campaign in similar fashion,
tracking via zip codes. Also, they will be testing a couple of
other offers with future catalog + email campaigns, including
bundled offers and two-for-ones.

The biggest challenge, says Eisenman, is how to capture
information at the brick-and-mortar level.

“Right now we’re just measuring call center and Web activity,” he
says. “If we could answer that challenge, then we’ll be able to
run from there.”

Not many POS systems actually capture customer data. Scannable
bar codes are an option, but Tower Records’ systems are
antiquated and are not built for database marketing. The company
is working to bring its POS system up to the level of its
database marketing capabilities, to capture more transaction
information.

“When we are able to see what impact email has on brick-and-
mortar response, that’s where we’ll really find the ROI value of
email,” he says. “If we can find that email drives brick-and-
mortar sales, we can start doing promotions for specific stores.”

That would give a whole new approach to the company’s email
campaign, which is now geared for online sales only.

“If we can show that it drives customers to stores it makes email
look less vulnerable in the marketing mix,” says Eisenman. “I
really do believe it does, but we need to be able to prove it.”