How To Increase Order Size
And Decrease Marketing Costs

Using Keycode Shopping Rewards

The Challenge:

"Sell more, spend less." Many of us in retailing recognize this phrase as our unofficial company motto. The concept is simple, but the challenge to implement a simultaneous performance enhancement/cost reduction strategy in marketing is extremely difficult.

If you are like most of the marketing executives we work with, you are probably contending with a number of adverse trends year after year that are making the simple challenge to reduce spending seem impossible:

• Rising direct mail and media costs
• Declining net response rates
• Increasing customer acquisition costs
• Flat or declining customer wallet share
• Increasing customer retention costs
• Declining growth in same store sales
• Shrinking net margins

These trends typically do not get better with decreased spending. Continuing to use strictly traditional direct marketing programs such as direct mail, newspaper advertising, and broadcast messages will assure you of only one thing: costs will continue to rise by a greater degree than the corresponding improvement in response rates.

It is common knowledge that 1 out of every 100 people you reach through direct mail, newspaper, and broadcast media will respond to your message. Whether or not you highlight it in analysis meetings, 98%-99% of your marketing budget is regularly wasted on people who have no intention of buying anything at the time they receive your message.

This presentation was written to explain how our multi-channel marketing method helps companies begin to slowly reverse the negative trends of traditional direct marketing programs. Keycode was designed to help you "spend less" (by helping you reach fewer, better prospects for less money) and simultaneously "sell more" (by causing your shoppers to spend 40%-75% more than they were planning) through custom promotional offers based on future purchase values.

Keycode specializes in offering multi-channel marketing programs for retail chains with no risk and no upfront costs. In the pages that follow, we will illustrate how our dynamic marketing method can be used to systematically increase your customer "wallet share" on a buyer-to-buyer basis through a patent-pending technique we call "Exact Moment Marketing."

What is Exact Moment Marketing?

Exact Moment Marketing or "EMM" is a technology-based marketing method that enables real-time, one-to-one promotional marketing anytime and anywhere. EMM gives you the ability to deliver custom, value-based shopping rewards to active buyers at the exact moment they are deciding where and what they will buy next using a wide array of online shopping resources.

Here's an example:

It's 9:37pm on Wednesday evening, and Jane Smith is at home checking her e-mail when she begins thinking about buying a new outfit for a weekend family event. She first begins surfing through retail web sites looking for new fashion ideas. Next she begins looking for special deals and in-store promotions on the search engines, shopping portals, and her other favorite "savings sites".

Like millions of other savvy shoppers using the Internet today, Jane performs many online actions that signify her immediate intention to buy something in the real world. Each one of her online actions signifies an opportunity to win or lose her business. Fortunately for our clients, we are perfectly positioned so that people like Jane can find exactly what they need.

During her research, Jane encounters a number of Keycode ads for a clothing store she knew in her area. The ads teased her with a free, printable shopping reward offering up to $25 off her next in store purchase. When Jane clicked on one of the ads, it asked her to enter the amount she was planning to spend in order to "qualify" her for the best possible reward. Jane enters $82.45 (because she saw an outfit she liked for about that price), and the ad instantly creates a custom offer  that explains how she could save $10 if she spends her $82.45 at our client's store within the next 5 days and how she could save $25 (the real reward) if she spends over $125 during her visit.

The next day, Jane shopped at our client's store and spent $156.80 instead of $82.45 because she found two outfits she liked and decided to buy them both since the extra purchase helped qualify her for the higher reward. In this example, the Keycode system automatically discovered an offline buyer with an immediate need buy, interacted with her to create a custom offer relevant to her immediate needs, and ultimately influenced her spend 85% more than she was planning at our client's store.

There are millions of real world shoppers just like Jane who benefit from extensive online shopping research each and every day. Jane's example is just one of many demonstrating how Keycode and Exact Moment Marketing can positively affect millions of dollars of in-store purchasing decisions for your company through the improvements in targeting, timing, and offer customization the Internet, yes the Internet, affords.

The Internet? - It hasn't worked so well for retail marketing before, why should it now?

Because the focus has changed. Over the past 5 years most retailers found out that spending money exclusively to persuade shoppers to transact sales over the Internet generally costs more than it worth. When you compare the usage and sales statistics, you can clearly see why:

Despite the fact that over half of the U.S. population now uses the Internet, 98.8% of all U.S. retail sales are still made in stores. The Internet did not change where most people shop; the Internet did, however, change how most people shop and how many shoppers pre-plan their offline shopping.

Because of some very expensive past mistakes, many retailers downplay the Internet's potential to positively affect their current in-store business. Whether they recognize it or not, the Internet is still the most significant marketing medium yet developed for retail promotions.

Here's why:

• Tens of millions of shoppers regularly signify when, where, and what they might buy in the real world through a variety of online actions all of which are trigger points for targeted offline promotions.
• The Internet is bi-directional and allows for instantaneous and customized promotional messaging. No pre-written form of communication can even come close to this powerful reactive capability, not even e-mail.
• Because there are no paper, postage, or production costs to speak of, the Internet is far less expensive to advertise to the masses. A plethora of performance-based programs are available that offer massive amounts of initial consumer exposure for free.
• The Internet is always "on." This allows your buyers and best prospects to interact with it whenever they are making important purchasing decisions. If you are not taking advantage of this opportunity, your competitors eventually will.

The important demand-based marketing advantages the Internet can provide can create the leverage you need to reduce your mass marketing costs and bypass the expense of delivering messages in mass through pre-written forms of communication.

All of the critical elements are in place for you to enhance your offline marketing strategy right now over the Internet within days without any upfront cost. Many of the critical elements are inherent in the medium itself, and some are inherent in the specific ways shoppers' are using the Internet for pre-shopping information. But in order for you to take advantage of all the cross-channel marketing opportunities the Internet provides, you have to know how to successfully and consistently:

1. Reach a growing number of active offline buyers
2. Set the appropriate ad triggers
3. React to individual buyer needs on a one-to-one basis.

Fortunately, we envisioned how shoppers would relate to the Internet years ago. Consistent growth and refinement of our method has enabled us to accomplish what many considered a marketing impossibility.

A Blueprint For "Selling More For Less"

If you really want to "Sell More For Less" you must improve the cost and performance metrics of conventional marketing. To improve cost and performance simultaneously, you must improve:

• Who receives your messages (Targeting)
• When they receive them (Timing)
• How the message is presented (Offer Customization)

Targeting: Buyer Targeting Can Cut Distribution Costs by 75%.

True targeting does not mean selecting "favorable demographics;" true targeting means finding buyers with immediate buying needs.

Unfortunately, the term "targeting" is generally misused in marketing. To most marketers, targeting typically refers to the process of excluding groups of people that possess demographic attributes dissimilar to our customer base. Targeting can also refer to the inclusion of certain groups of people by historical purchase data. Both of these techniques help make the selected group seem slightly more likely buy than the general masses.

But the problem with traditional targeting is that demographic profiling and historical purchase data cannot help you predict when your target audience is most likely to buy next.

If the people you target are not "ready to buy" when they receive your message, they will not buy. Regardless of how demographically precise or historically significant you think your target data is, if your message reaches the bulk of your audience too far in advance of a purchasing decision or any time after a decision has been made - the majority of your messages and budget will be wasted.

This is why 1%-2% net response rates have been the rule of success in the direct marketing industry for well over 100 years. No matter how you justify it, 98%+ waste factors are tangible and undeniable evidence of extremely poor targeting.

Before the combination of Keycode and the Internet, it was virtually impossible for marketers to tell when people were actively planning to buy on an individual, one-by-one basis. Because we designed our service to function as an "on-demand" savings service, millions of buyers seek us out and use our ads and websites whenever they are ready to buy. Who would you consider as more valuable targets than those shoppers who are expressing an immediate need to buy?

The Keycode method allows marketers to improve their promotional targeting by reaching only those people who are actively expressing an immediate need to buy no matter what their demographic profile indicates or what they may have purchased in the past.

Timing: Precise Timing Can Multiply Response Rates 30 Times.

Keycode targeting can help you decrease costs, but saving money alone will not help you increase sales. To increase sales, you need to dramatically improve your net response rates; and to improve net response rates; you must time your messages to respond to buyers' needs within seconds.

The vast majority of shoppers do not make purchasing decisions as a group or on a pre-set date or time. Since most advertising mediums send the same messages to the masses at preset times and dates, they are not capable of delivering ads to buyers individually based on need. The only way to significantly improve the timing and delivery of your promotional advertising is to give individuals the ability to receive your messages when they need them and not when it is most convenient for you to send them.

In many respects perfect targeting and timing are interlocked; if you can find buyers individually as they are planning to shop you should be able to deliver your best messages at the perfect time with a bi-directional medium like the Internet. But if you understand the dynamics of the Internet and how shoppers are using it for quick research, you will understand that you only have a matter of seconds to convert critical buyer opportunities.

When you have successfully identified a buyer online, you have less than 6 seconds to provide that person with a relevant message. All of our Keycode ad triggers are set to attract buyers, engage them, and deliver a highly persuasive promotional message within 1-3 seconds.

Many companies make the mistake of trying to acquire personal information, e-mail addresses, and other "informational road blocks" that only serve to grind buyer interaction down to a halt and keep the majority of potential buyers from receiving useful messages. In order to provide our users with the most timely delivery service possible, we have stripped out informational roadblocks completely. Keycode ads do not require any personal information prior to offer delivery. This is why we typically experience net response rates of 15%-30% - 15-30 times the average net response rate of traditional direct response mediums.

How many more sales would you be producing if your marketing efforts realized consistent net response rates of 25%-30%?

Custom Offers: Customizing Promotional Offers "On Demand" Can Increase Order Size by 40%-110%.

If targeting improvements cut costs and timing improvements lift response rates, then offer customization can be used to increase wallet share.

The Keycode method has many unfair advantages over traditional direct marketing programs because of our direct link to active buyers. None of our advantages, however, are more compelling or valuable than our ability to derive the value of future buyers prior to message delivery. This advantage speaks to the very heart of marketing and volume retailing in particular.

Because buyers freely enter the amounts they are planning to spend in order to qualify for the best possible Keycode rewards, we can use buyer values to construct unique offers that guarantee buyers will spend more than they were planning on average. Keycode rewards never allow shoppers to spend less than they have entered and qualify for a savings, but more importantly, our offers always present more attractive rewards for increases in spending.

We customize each and every offer distributed through our system with the data input by our active buyers specifically in to increase wallet share. This method is so successful at systematically increasing transaction amounts that the process is officially patent-pending.

The only way to truly "spend less and sell more" simultaneously is to attack and improve all three critical fronts we have identified on a consistent basis. All of your marketing efforts should: reduce costs (through Improved targeting), increase response rates (through improved timing and delivery) and increase your wallet share (through custom offers). Anything less will make it very difficult to achieve what is being asked of marketing professionals in today's economy.

The Power of Leverage

Small efforts produce big results when you utilize leverage.

By targeting buyers instead of mass audiences, Keycode produces real marketing leverage. By opening new channels that are capable of interacting with buyers as they are making purchasing decisions, Keycode can give you the leverage you need to make your marketing efforts less costly and far more productive.

In the time it took you to read this, thousands of shoppers decided where to buy things your company sells through pre-shopping research on the Internet. Some of your best customers probably found compelling information and competitive offers that led them to buy somewhere else needlessly. With our help, thousands of new potential customers can be influenced to buy from you each and every day. We can help you cost-effectively gain new customers and retain customers who are about to shop elsewhere on a regular basis, but most importantly, we can help you build margin by increasing wallet share one customer at a time.

If a potential customer wants to pre-shop for the types of items you sell right now, where would they go? Would they remember to check your website? If they did, do you think they would end their pre-shopping research there? Probably not.

Would they turn on the TV and wait for one of your commercials? Would they pull last Sunday's newspaper out of the trash and look for an ad? Would they wait indefinitely for direct mail from you or your competitors? Definitely not.

In the modern age of digital communication and 24 hour accessibility, where anything and everything having to do with retail is at your customers finger tips in seconds, more and more people are using free pre-shopping resources on the Internet, like Keycode.com, regularly.

You cannot make the improvements in cost reduction and response efficiency your company needs simply by continuing with traditional marketing methods. Keycode is an inexpensive method that reaches fresh buyers on a regular basis. You do not pay for errant deliveries, printing, or paper waste. You only pay for ready buyers, and you pay for them after they have made their purchases.

The bottom line: Companies that offer customers what they want, when they want it, through the channel of their choice, whether their business is online, offline or both, will retain their best customers and increase their value. We make this possible. We are ready to work for you. Call us today.