Marketing: Informing Customers
While most company owners say that word-of-mouth marketing is important to their business, few take it as seriously as Janene Centurione, who operates two Great Harvest Bread bakeries, in Ann Arbor and Birmingham, Mich. The $2.2-million business turns loyal customers into experts, enlisting them to spread the word about the company's gourmet bread.
Centurione and her 50 employees look for enthusiastic patrons who ask lots of questions about the bread and pastry products. Employees then ask those customers to sign a guest book, which automatically initiates them into a "bread zealot" club.
Aside from funds for an occasional newspaper advertisement, virtually all of Centurione's marketing budget is used to inform and reward the special customers. Each month she sends out to almost 7,000 people (about 20% of her clientele) postcards that share information, like bread recipes. Zealots receive early notices about new product releases, along with the occasional 10%-off coupon. Some postcards thank customers for their referrals, which Centurione knows they're making, since the only place she mentions her latest breads is on the postcards, and the majority of orders come from people who say they heard about them from a friend.
Centurione estimates that the annual cost of keeping customers in the know comes to about $7 a head and that each recruit to the club brings in about $200 a year. She contrasts that with the $80 a year she spent on bringing in each new customer when she relied solely on traditional advertising. In two years, per-visit sales have climbed from $4.75 to $8.75, which she believes is directly attributable to an increased awareness of her products. Simultaneously, net sales have grown 18% a year for the past three years, while the number of zealots has increased almost 10-fold. -- Sarah Schafer