Tim McNulty was relaxing at home when he received an e-mail on his BlackBerry from an unhappy customer, informing him that the tortilla-crusted halibut served at his restaurant was too spicy to eat.
McNulty, who owns the Lobster Pot in Provincetown, Mass., headed back to work and figured out that a harried chef had accidentally substituted cayenne pepper for chili powder and smoked paprika in the spice mixture that seasons his halibut entr?e. He e-mailed the disgruntled customer to explain the mistake and invite him back to the restaurant.
McNulty is among a growing number of small business owners who are using technology to improve service and market to customers in increasingly personal ways, said Tad Clarke, editorial director at MarketingSherpa, a digital marketing research firm in Warren.
National retailers and large chain restaurants have used the Internet to survey customers and conduct customer loyalty programs for several years, but the practice is catching on with smaller businesses as they are increasingly targeted by companies that specialize in digital marketing products and services, Clarke said.
“The big guys have already got all their loyalty programs set up, so the next place to turn would be the mid-sized companies, and then after that it’s the smaller companies,” Clarke said.
McNulty received the e-mail about the too-spicy halibut dish as an instant alert sent to his PDA whenever a customer gives an unsatisfactory review of his restaurant. The service is a feature of a customer information management system owned and operated by BizGrader, a three-year-old company based in Providence that is pushing aggressively into the market.
BizGrader offers its clients – most of which are small- to medium-sized businesses in Rhode Island and southeastern Massachusetts – a subscription-based service that collects, aggregates and reports feedback from customers.
The company’s secure, user-friendly Web site also enables its clients to compile profiles of customers in their loyalty programs and conduct highly personalized marketing campaigns via e-mail and text message.
Customer loyalty programs conducted online are faster and cheaper than traditional direct-mail marketing campaigns, said Clarke. By definition, they are also more interactive, enabling businesses to develop a finely detailed portrait of their customers over time and to adjust their marketing accordingly.
Businesses conducting their loyalty programs on BizGrader’s system compile comprehensive information about their customers in 18 standard fields and 15 customizable fields. The personalized marketing that follows results in fewer dropped subscribers, said Jerry Hoff, BizGrader’s president.
“The customer has said, ‘This is what I am all about, this is what I want to hear from you about,’ and now [businesses] know how to build loyalty,” he explained. “Now they can say, ‘I want to send an e-mail message to all of my customers that … come in during the week, sit at the bar and like sports. If you never go to a place on the weekend, and I’m always telling you about weekend stuff, after a certain while, you’re going to unsubscribe.”
E-mail marketing can give businesses a substantial return on investment if done right, providing returns of $51 for every $1 invested, as opposed to an average $12 for every $1 invested in traditional direct marketing campaigns, according to a recent study by the Direct Marketing Association of America.
And digital marketing is quickly moving beyond e-mail to encompass text messaging and soon even multimedia marketing – essentially, sending commercials to people’s cell phones. Distinct, identifiable segments of the population communicate through different digital media, and businesses that market to their customers using their preferred mode of communication will profit, Clarke said.
“There are several businesses out there doing text messaging to younger people. That’s the world that they live in – they’re not checking their e-mail like those of the generation above them,” Clarke said. “We’re noticing text messaging is becoming pass? with the college crowd. They’re going to MySpace and FaceBook, and saying, ‘Post a message to my MySpace account.’ ”
BizGrader asks customers of a nightclub client for permission to text message them instant updates on live entertainment and special promotions. Most of the nightclub’s customers, who are in their teens and early 20s, opt into the service immediately, Hoff said.
McNulty, who has operated the Lobster Pot for 35 years and turned to technology to bolster his business about three years ago, prefers to receive e-mails on his Blackberry.
“If somebody’s got a gripe, it comes right to my hip and I can respond to save a customer,” McNulty said. “They’re getting better service, better food, better everything, and in turn they come back more often.”
