What would you pay for a tactic that gets new customers into your store, gives you an unbiased report on your company's service, and brings you lots of new ideas?

Gary Cino, CEO of 98¢ Clearance Centers, thinks it's worth $5.

When Cino, whose company is based in West Sacramento, Calif., meets someone who's never set foot in one of his 18 retail stores, where every item costs 98¢, he hands the prospect an envelope. Inside are $5, another envelope stamped and addressed to Cino, and a single-sheet questionnaire with a dozen queries such as "Did the cashier greet you at time of checkout?" The first-timers are also asked to rate the store's appearance and products, and to provide comments and suggestions. Customers are also asked to attach a copy of their cash-register receipt.

"We're bribing them, but it's a relatively inexpensive way to accomplish a lot of things," says Cino, whose stores gross almost $30 million annually. He and his executives pass out some 500 packets a year, amounting to a measly $2,500 cash expense. About 85% of the shoppers return the survey within 90 days. Responses are posted at each store.

The attached receipts show that most of the new customers spend considerably more than $5. The feedback is worth even more. "It lets our employees know that at any time, any given customer could report back to management," says Cino. As for changes, Cino is considering accepting personal checks because so many survey participants have mentioned them.

The envelope-and-cash technique is better than using mystery shoppers, says Cino. "We get more accurate information, and the respondents match our demographics."

-- Susan Greco

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