Case Study: Pet Supply Chain Finds Value in SMS Advertising
Retailers and brands can quickly reach their most frequent customers using text-based advertising, however Lipof Advertising creative director Nathan Lowery says businesses that inundate their customers with meaningless marketing messages are actually doing more harm than good. In his experience handling advertising and marketing for Pet Supermarket, a regional pet store chain with 127 outlets in Florida, Georgia, North Carolina, and Tennessee, Lowery has noticed that customers are less likely to unsubscribe from SMS advertising lists when they’re sent messages that have actual value, like coupons and discount codes.
Tell me about Lipof Advertising’s relationship with Pet Supermarket. How have you helped manage their campaigns?
We have been their advertising agency for about 10 years. We provide all of the print, radio, TV, and digital marketing solutions for them. That includes media placement, and production; everything soup to nuts.
Given that you’ve been working with them for the last decade, what are some of the changes in advertising or media placement that you’ve noticed over that time?
We’re doing more customer retention, which would involve text messaging, Facebook, and direct mail to existing customers. In the past, it was more customer acquisition. We still do a lot of customer acquisition with consumer advertising, but we’re also able to do more targeted messages because we have more data to work with now. [We look at] geographical data, demographic data, and purchase history. [How we get this data] depends on what our objective is. For the purchase history, Pet Supermarket has that data. For the geographical data and household income data, we can buy that when we buy mailing lists. We’re also able to do things a little quicker now that Facebook is instantaneous and text messaging is pretty much instantaneous.
What are some of the challenges that Pet Supermarket has when it comes to customer retention or customer acquisition?
I think one of the main challenges is the competition, because there are a number of other pet supply retailers that carry very similar products or the same products. We try to inform customers that Pet Supermarket stores are a little bit smaller, but they also pride themselves in having much better customer service, which some of the other pet specialty stores don’t offer. So that’s one big challenge. Another challenge is that a lot of people still purchase their pet food from the grocery store or from stores like Target or Wal-Mart, which would be considered mass retail. We try to explain the benefits of feeding a premium pet food, so the customer buying their dog food at Publix [knows he] is not [getting] the same quality as a higher end food bought at a pet specialty store.
I know Pet Supermarket sends text-based coupons. How did you first get involved with that?
We knew Marcos [Menendez, CEO of Momares, a mobile coupon platform] because he was already working for us on an e-newsletter. His other company, Loop Consulting, was doing our e-newsletter, and he brought us the idea. He showed us some other companies that were doing [text-based promotions] and some case studies. We started advertising [the program] in the stores and on printed materials to get people involved, and it really took off. A lot of people were interested. Every month we [pick] a winner and give away free pet food for a year. So everyone who enters [their phone number] has a chance to win. Then, we also send out coupons and messages. We want to keep the messages fresh, and we want to not overdo it. We typically send out one or two messages a month. We don’t want to annoy people, and we pay [Momares] per text message.
We are able to see when people leave the group or want their numbers removed from the list, and we have found that as long as we’re sending messages that have value they are staying in and they love it. If we send messages that don’t have value, don’t have some sort of savings, or are very product-specific, then they will leave. We can actually see that happen. We try to have some sort of value with the messages — usually it’s a $1-off discount across any purchase. [That allows] dog food customers to take advantage of it, cat customers, bird customers, and fish customers. It’s not brand specific or anything like that. We send the same message to [customers] at all [Pet Supermarket] stores because we’re not able to see, or we don’t know, what stores the people shop at. All we know is their area code. Beyond that, we don’t know where they’re at.
What has the feedback been from customers since you started sending mobile coupons?
They seem to like it because we send out a lot of coupons by text. In today’s economy coupons are very big, so people see a lot of value in it. We have a lot of people joining and we have very few people opting out, so I think there’s a lot of interest. We are able to track the redemption rates on the coupons that we send out and the messages that we send out. We just send out a five-digit code and we say what the offer is. [Customers] just show the associate at the register that five-digit code, and they get the discount.
Looking forward, where do you see Pet Supermarket’s going in terms of marketing and advertising?
I think it’s going to get more and more specific, to where we can track customers’ spending habits and we can tailor messages directly to those customers. If someone is a Nutro dog food buyer, we’ll [be able to] send them messages that pertain to Nutro dog food. And, we’ll be able to group people by how often they shop. With smartphones, at some point we’re going to be able to send out coupons with an actual bar code or an actual graphic. I think that’s probably going to be happening sooner rather than later.
Stephanie Miles is an associate editor at Street Fight. This interview has been edited for length and clarity.
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