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Key Idea: Stay Close to Your Best Customers

Bob Orenstein says that you can't mail to your customers too often.

Key Question:

A: 

After years of being in the catalog business, Bob says the general rule of mail order is real simple: You cannot mail your best customers too often. So he continually creates offers and keeps mailing.

Q: How does Bob identify his best customers?

A: He said, "That's database marketing. This is where the computers come in. This is where the data is extracted, interpreted, manipulated, and then we get an output, and from that output is what we mail."

Q:   Who is Bob's target demographic?

A:
  He said his research shows that his customer demographic is generally, "... a baby boomer thing. We're for people between 35 and 55. And the people that are spending the money on wine cellars and expensive glasses tend to be 45 to about 52." Knowing your demo means more than just having the names and addresses of people in an age group. Knowing means understanding them. In Bob's case, he is personally part of his demo which may make it easier for him to get inside the minds of his customers. But you have to remember that you are only one person and you have to listen to others even if you are part of your audience.

Bob is a member of the Direct Marketing Association which is good place to learn about demographics and how to reach a specific target of people. Also, see demographics.com and fedstats.gov.

Q:
How does a mailing list develop?

A: Laura McClendon is a list broker. She gave us some advice about how to search for a mailing lists to reach any demographic. John Wargo gives us tips about direct marketing.
There are other companies that have had successful catalogs: Jim Morris Environmental T-Shirt, Sundance Catalog, and Madison Park Greeting.

Q:
Does International Wine Accessories only mail to the homes of individuals?

A: No. One third of the business today comes from wholesale distribution to wine stores, gift shops, hotels and restaurants. We visited the "white table cloth" restaurant which is part of a Houston-based chain. It buys wine glasses and Kobe Beef from Bob. 

Think about it

How do you know what your customer is thinking?  How do you define your target market?

Clip from: International Wine Accessories (IWA) and Bob Orenstein

Dallas, Texas: Meet wine enthusiast, Bob Orenstein; he started his business to serve people who, like himself, love fine wine. But, it was not easy. Learn how perseverance paid off. Slowly his company served hundreds of thousands of customers around the world. He  became the  authority on wine accessories and his customers began to depend on him to find items they could not find elsewhere.

From a spare bedroom of his condominium in 1983, it took him over ten years to break into the domain of the fast-growing businesses. He talks about business basics -- delivering quality products and extraordinary service.

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International Wine Accessories, Inc. (IWA)

Robert Orenstein, founder

10246 Miller Road
Dallas, TX 75238
2143496097

Visit our web site: http://www.iwawine.com/

Office: 2143496097

Business Classification:
Home products

Year Founded: 1988

Stay Close to Your Best Customers

HATTIE: International Wine Accessories has a database of 400,000 customers and will mail three million catalogs in a year. The ink-jet on the outside. Is that saving you dollars in the printing process?

BOB: Well, the ink-jet allows us to print only twice a year, and each time we print, we print seven to eight covers simultaneously. And we have a little white box on the front cover, which we're able to change the offer. So each drop, we can change the message. The cost of ink-jetting is nominal. Instead of going out and printing, you know, 200,000 this time and 200,000 this time or half a million, then another half a million, we print twice a year and we get the economies of scale, which basically lower our costs dramatically.

HATTIE: How do you get people to keep buying from you?

BOB: Well, it's real difficult, but the general rule of mail order is real simple: You cannot mail your best customers too often. So what you do is that you continually mail to whoever you designate as your best offers. How do you designate them? That's database marketing. This is where the computers come in. This is where the data is extracted, interpreted, manipulated, and then we get an output, and from that output is what we mail.

HATTIE: OK. Talk to me about that. Is that another outsourcing situation?

BOB: That's an outsourcing situation. Basically, although we're a PC-oriented company here and we use a file server with Netware to run the business, in the real world, everything's run on IBM mainframes. That's what happens in the real world. So what we do is we have a parallel database; we have one here and one there. You know, I'm in the marketing business. I have to do marketing. But I found that marketing was a lot easier to learn than accounting, and that accounting and finance gave you the disciplines of knowing how to analyze. Well, what marketing really is, is we all think of it as coming up with creative ideas. Well, creative ideas are not that difficult to come up with. The real idea is, how do you measure whether that creative idea works or doesn't work? Well, you have to have a financial background to analyze it. So direct marketing, which really boils down to statistical analysis, is exactly what I fell into. So it was a natural for me.

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