Page 1 The 6 BOX FREQUENT BUYER PROGRAM By Bob Negen
Page 2 Table of Contents My Favorite Frequent Buyer Program... 3 How to Set Up Your 6 Box Program... 4 Give it a Name... 4 Gather Your Materials... 4 Deliver the Credit... 5 Common Questions... 6 Aren t I giving away money?... 6 What if my program gets too big?... 7 I ve got a Program in Place Already.... 8 You re Ready to Start!... 9
Page 3 My Favorite Frequent Buyer Program In this report I m going to share with you the secrets of my favorite frequent buyer program. If you follow these directions and use this program, you re going to love it. I guarantee it. A good frequent buyer program rewards the two most important buying behaviors, shopping more often, and spending more money. But every good program does that, right? But one of the great things about this program is that it does these things, plus it is incredibly easy to administer; meaning, you can start it right away. The 6-Box Program also fosters incredible customer loyalty. Dozens and dozens, if not hundreds and hundreds of our clients and people who are following are using this; and they all rave about how it makes your customers so much more loyal. And finally, last, but certainly not least, it is a great mechanism to collect customer information. You can t underestimate the value of your customer database. Your customer database will have a huge impact on your future success, and the 6 Box Program is a mechanism that helps people easily, naturally, and without hesitation share their contact information with you.
How to Set Up Your 6 Box Program 6 BOX PROGRAM Page 4 You can actually have your 6 box program up and running in your business within a half hour of finishing this report. It s that easy to start. Give it a Name Step 1 of creating your 6 box program is to name it. What are you going to call your 6 Box Program? You could call it a frequent buyer program, but it s not very sexy. I would recommend that you give it a name, a name that maybe ties into what you sell or what you do or your store name. For instance, at a kite store we had a Frequent Flyer Program, right? Kites fly. You could have a Great Gardening Club, or a Super Sewer Society. You could use a name that is an alliteration of your store name, but give it a fun and memorable name. A name is so much more powerful than Frequent Buyer Program, right? It s more powerful than a VIP Program or a Loyalty Program because it s not cookie cutter, it s specific to your business and your customers. Think about making it a club, a society or even an institute. So you first step is to start brainstorming and come up with a name. Gather Your Materials Once you have a name, get a pack of index cards and a file box for them. One side of the card contains spaces for their contact information. When someone joins your program, you have them fill out their contact information, like their name, address, phone number, and their email address- maybe even their birthday! Remember, one of the things we re doing is we re building our database. Email marketing is a powerful tool, so you want to get their email address. Don t discourage your customers from joining by make it a big, long form (which you probably can t do on a little card anyway), but make sure you get all the information that you need.
Now flip the card over, on the other side there are six boxes, and every time your customer makes a purchase, the amount of their purchase, minus tax, is put into one of the boxes. Then the clerk or whoever your salesperson is puts a date and their initials on it, and then it goes back into the file. 6 BOX PROGRAM Page 5 Next get an alphabetized box like a little recipe box to store your card in. You re going to end up having big long recipe boxes or many, many tubs of these cards, once you re up and running for awhile but they re all kept sitting out on your sales floor with alphabetized dividers. What happens next is your customer comes in, and goes to the section in your store where the boxes are kept. Maybe it says Great Gardening Club and there s a little signage. Maybe right next to it is a sign of benefits. There could be some announcements for your Great Gardening Club members. But it s kept out so when people come into your store, they go and they pull their own card. This is important. They pull their own card, they shop, then they come to the counter and you fill it out. This is really, really, powerful because a couple things are happening. First of all, when people see that they ve got two or three or four boxes filled out, they start to spend their credit in their minds. So if I ve got $150 in purchases, I m thinking, I ve got $15 to spend. What that does is, it prompts a quicker repeat visit. So that piece of paper, that little card that they hold in their hand, is incredibly important. Someplace in the process, the amount of money that is in each of the boxes turns into a future transaction, which is absolutely beautiful. Deliver the Credit What happens after your customers fill out the six boxes? Some people just make it a credit and write it down on the bottom, and then the shopper pulls their card and uses the credit the next time they come in. Some people give the customer a gift certificate for the amount of their credit. We ve even known some people who are very proactive about the relationship, and they actually send the customer s credit to them in the mail in the form of a gift certificate and a thank you note. It s up to you. That all! It doesn t get any simpler than that, right? When you start to this program in your store, your customers will just love it.
Common Questions 6 BOX PROGRAM Page 6 I ve got a POS system. Can I just use that? You POS system captures customer data and purchase history, but it isn t a replacement for this program. Both of them serve a function, but the frequent buyer program in your POS system is not nearly as powerful as the 6 Box Program. Here s why. When people come to the register, if you don t remember their name or your part-time employees don t remember their name, what happens? What do they say? How does that make your regular customer feel? I was just at my local health food store, and do you know what the cashier says to me every time I make a purchase? Are you in the computer? I always want to answer, No. I m standing right in front of you. Let s compare that to this scenario: I walk up with my card, the staff member looks at it, and she says, Oh, hi, Bob. You see, when you use this program, every single person who comes to the counter who has a card is greeted by their name whether you have a full-time employee, whether it s you, whether you have a part-time employee, and that s a lot more customer-friendly than, What s your phone number? What s your last name? What s your address? Are you in the computer? This card has whatever information you need to call them up in a POS system without having to ask them for their identity every single time they shop. Right away you are building a stronger, warmer, relationship. What s your name or Are you in the computer won t make your customer feel as special as Nice to see you again, Bob! What s the appropriate percentage? The question of how much is the appropriate percentage for the giveback is one of the most often asked questions and there s really is no definitive answer. However, for most retail stores that have roughly a 50% cost of goods, 10% seems to be a number that works like a charm. When you think about it, you re giving 10% back; and so it s really only costing you 5% when you back out your cost of goods. Aren t I giving away money? Absolutely not! The people who are thinking incorrectly about this program assume that they would have made those sales whether the program was in place or not, and it s just not true.
Page 7 This program is what makes people drive out of their way to shop with you. This program is what gets people to make a point of buying from you rather than getting it online where it s more convenient. It absolutely increases the number of transactions per customer. So if you re thinking that you re giving away money, you re looking at it incorrectly and inaccurately. We have a client who has a great big store in Wisconsin. And the last time I checked she had 14,000 cards; and her husband found her an old library box with the pullout drawers. She told me I remember the first time I sent a gift certificate out (she s a person who actually sends the credit in the form of a gift certificate to the person who has earned it) and she said it was for $80. She said, I almost had a heart attack. I thought I was sending out $80. And then she thought about it and realized this person had spent $800 with her. She shifted the way she was looking at it to, Wait a second. I m making an investment. I am reinvesting in my best customers. I read a statistic from American Express that concluded that in retail the best customers outspend the average customer by a ratio of 16 to 1. Your job as an independent retailer is to nurture those best customers, and this is a wonderful way to do it. Let go of the feeling that you are giving away money that is yours and recognize that some of that money is extra money that the program has generated, and certainly, you should see it as an investment in your best customers. What if my program gets too big? My program is getting out of control! I hear this lot. People start this program, their customers love it, the program explodes, and all of a sudden they ve got 10,000 names and it s unwieldy. And so they call and they say, I m thinking about changing over and putting my 6 Box Program into my computer s frequent buyer program. And you can imagine what I always say to them? Don t do it! If your collection of cards growing and growing it s because your customers are responding to it, they are becoming more loyal because of it. You might have a logistics issue but you don t have a problem! You have a wonderful, wonderful program that s working like a charm. You just need a little organization. One of the ways to help your customers stay organized is to have a pile of colored cards right next to your boxes. So if let s say I go and I pull my card, rather than having to find my place back in the box, I grab a pink card and I set it vertically so that after I m done shopping, I can easily put it back. Another piece of advice I got from somebody who did have literally over 10,000 names is, she hired a junior high kid to come in once a week spend a couple of hours rifling through the cards making sure that they were in order. Another way to manage it is in your closing checklist, every day of the week a certain portion of your program is sorted to make sure that everybody s in about the right place. Perhaps you could
Page 8 even have a separate file box for cards that haven t been used in 6 months, or a year. Then your really frequent buyers have fewer cards to sort though. This is simply an organizational issue. It s not a problem. You ve got a beautiful program that s working like a charm! Don t throw the baby out with the bathwater, so to speak. I ve got a Program in Place Already. I hear this a lot. And almost always the program isn t nearly as cool as this program. All you have to do is convert your current customers over; give them a credit for what they ve already earned. Figure it out and give them the benefit so that they feel good about the switch. Always position the switch as a positive benefit. I ve got this great new program you re going to love. Here s what we re going to do... I know several people who have programs in place where a customer gets a regular percentage off -- one was 3%, one was 5% -- an automatic 5% discount, because they re good customers? The problem with that program is you re not rewarding frequency, right? You re not giving anybody any love for coming in more often. Positioning the switch is quite simple. You re not saving 3% or 5% anymore, you re saving 10%. Maybe you give them a $100 credit on their first box. That seems generous, doesn t it? But when you think about it, a $100 credit on their box is going to translate into a $10 store credit when they redeem, which, if your cost of goods is 50%, it s going to be $5. It s going to cost you $5 to get that person to switch over. You could give them a $50 credit. You can do it however you want. Figure out something that makes everybody happy. Remember, this program is going to make you a lot of money. Another thing you could do to make the transition fun is to have a contest. Say, I m introducing this great new program, and to kick it off, I m having a drawing. And everybody who joins the program is going to be eligible for a grand prize given away on a certain day via a random drawing. Call your vendors, call a bunch of people, make sure you put together a really nice gift, and just make it fun. Incentivize people to switch over. Always position it as a benefit to them.
Page 9 You re Ready to Start! Those are the basics of this program. Like I said, it s so doggone simple I would encourage you to do it right away. You re going to be amazed. Put the 6 Box Frequent Buyer Program to use in your business right now. You ll be glad you did. Want more great tips? Sign up for Bob s FREE WhizBang! Tip of the Week. You ll get great business-building information delivered directly to your inbox every week. These tips are not high falutin-academic theory or pie-in-the-sky fluff, they are practical, proven ideas to help you run a success full retail store. Here is what one reader said about the Tips I wanted to drop you a note letting you know that due in large part to you WhizBang! Tip of the Week ideas, our wild bird supply store had a record year and we ended up 25%. Tell your readers that the WhizBang! Tips lead to actual positive results; they are not just words printed on paper. Thanks again, from each of us at The Birdhouse of Freeland. Dick Beekman, a.k.a. One Happy Camper! Bob and Susan Negen 233 Washington Ave. #213 Grand Haven, MI 49417 Phone: 616-842-4237 Fax: 616-842-2977 E-mail: info@whizbangtraining.com