Looking for ways to stimulate sales in a dry economy by ProQuest

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									                     Finance
Looking for ways to stimulate sales in a dry economy
Companies consider credit insurance, customer rewards programs                                                               which may be asked to custom-order some
                                                                                                                             goods, can mitigate risk by not extending cred-
              BY MARTIN C. DAKS                                                                                              it to someone that appears on our list.”
                                                                                                                                                                                   Timing is everything
                                                          Corporate Strategy
PIC Corp., a chemical manufacturer and dis-                                                                                        Conversely, he said, companies that offer       IN OCTOBER, just as the economy was
tributor, is in the business of killing bugs. But     less expensive than factoring, an arrangement                          debt-relief services might use the database to        beginning to unravel, Wayne-based Toys
when the Linden-based company got stung a             where a company sells its receivables, usually at                      target individuals that are having credit and         “R” Us Inc. launched Rewards “R” Us, the
few times by deadbeat customers, owner Allen          a hefty discount, to a third-party collector.                          cash-flow problems.                                   business’s first loyalty membership pro-
Rubel thought it was time to look into credit               “A lot of companies don’t know about cred-                             With consumers constraining their               gram. Customers can accumulate points
insurance, a kind of backstop that will pay off       it insurance, or think it’s too expensive,” said                       spending, companies are also doing their best         redeemable as rewards dollars, and are
his invoices if his customers go belly up or oth-     Michael Zeldes, a senior vice president at Hub’s                       to hang on to established customers. One way          eligible for exclusive one-time offers and
erwise default on their obligation.                   New York office. “In the last month or so, we’ve                       to do that is with customer loyalty initiatives,      other deals and promotions, said Greg
      As businesses wrestle with the worst            seen an upsurge in the number of companies                             like the rewards program mounted by A.C.              Ahearn, senior vice president of market-
economy since the Great Depression, more are          looking into and applying for coverage.”                               Moore Arts & Crafts Inc.                              ing and e-commerce.
looking at ways to stimulate their sales, or at             Some businesses, like Red Bank direct                                  “People who enroll in the no-fee A.C.                “Plans to put the Rewards ‘R’ Us pro-
least limit their losses, industry insiders say.      marketing services firm V12 Group, act as a dis-                       Moore Rewards program earn one point for              gram in place began long before the pro-
      “We deal with a lot of retailers,” said         tant early-warning system on behalf of clients.                        every dollar they spend, and can get double           gram’s launch last fall, and it was not a reac-
Rubel, who took over the 56-year-old business               “Our Financially Distressed Data Suite                           points when they spend $100 in a single trans-        tion to current economic conditions,” he
from his father-in-law. “In this economy, you         rates millions of people based on their person-                        action,” said Scott Ridgely, director of loyalty      said in a statement. But “we’ve been very
just don’t know who’s going to be around long         al leading economic indicators, including                              programs at the Berlin-based crafts company.          pleased with the number of Toys ‘R’Us and
enough to pay their invoice.”                         whether they’re 90 days or more late on credit-                        “They receive a $10 reward certificate when           Babies ‘R’ Us customers who have signed
      Rubel is taking a hard look at credit insur-    card payments, whether they’re overextended                            they reach 200 points.”                               up for the program.” ◆
ance policies offered by Hub International            on their mortgage and other metrics,” said Jeff                              The program — which Ridgely said was the                                       — Martin C. Daks
Northeast Limited, a Chicago-based insurance          Berke, the company’s executive vice president                          company’s first — was originally introduced on
brokerage with an office in Berkeley Heights.         of sales and marketing. “Businesses can run                            a test basis in a few stores in September. Based
      For a fee that varies with the creditworthi-    our suite against their own marketing database                         on the results, management plans to roll it out to   happened that we implemented it when the
ness of his clients, Rubel can be assured of being    and decide which individuals should be                                 all 133 A.C. Moore stores in early June.             economy started to decline. But either way, it
paid regardless of what happens to his cus-           dropped because they’re not likely to be a                                   “We were looking into this rewards pro-        was great timing.” ◆
tomer. He says credit insurance appears to be         creditworthy customer. So, a furniture retailer,                       gram for a long time,” Ridgely said. “It just so                           E-mail to mdaks@njbiz.com




Employers must navigate legal
                                                                                                          Steven J. Dundas




                                                                                                                                 Protect the company
‘minefield’ to institute furloughs                                                                                               while cutting costs
                                                                                                                                 ■  Before slicing staff, search for
                                                                                                                                 other ways to cut costs.
Companies’ careless cuts can lead to a date in court, experts say                                                                ■ Talk to a labor and employment

                              
								
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