CASE STUDY: Blockbuster - Fast forward; Building loyalty in video rental
Simon Clarke, freelance journalist, Direct Response, 12 March 2003, 12:00AM
The video rental market is highly volatile: could Blockbuster make any difference with its CRM programme Premier? Simon Clarke reports. Share this article
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The video rental market is essentially flat, with few seasonal peaks apart from the Easter holidays. Demand-drivers tend to cancel each other out - with good weather in the summer (bad for video) being compensated for by the presence of children on school holidays (good).
It is also volatile - consumers are likely to dip in and out of the market, with little indication as to why. This all makes it difficult for video rental companies to predict and manage demand.
Because of this, rental chain Blockbuster has implemented a data-driven direct marketing programme, Premier, to make the switch away from generic, new release-led marketing, to customer-focused promotions. These aim to find, and hang on to, its top renters, driving them in-store more often and increasing their average monthly spend.
The programme, run through marketing agency Armadillo Associates, began a little over two years ago, when Blockbuster realised the need to improve the quality and quantity of data it held on its five million-strong customer base. Based as it was on the information customers give when they take out membership, it was limited to basic communications details such as name and address.
"We actually only finally started to capture basic demographic data, date of birth, and gender last autumn, believe it or not," says Blockbuster head of marketing Geri Birt. "The problem was our point of sale system, which, as with most retailers, was never designed for marketing applications, so we've had to upgrade it."
In addition, Blockbuster now captures e-mail addresses and mobile phone numbers with...
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