Recently, I started working with an automotive repair shop; Davis Repair. They recently hired a BMW technician. They wanted to reach out to nearby BMW owners to try to lure in some new customers. They weren’t sure where to start…
The shop owner wanted to test direct mail on a small mailing to evaluate if he should make it part of his 2010 marketing plan. We developed a campaign to market to the 500 BMW owners closest to his shop. The campaign was very simple; three monthly mailings of the same postcard to BMW owners.
The first set of cards was mailed in November. About a week after the mailing, Davis Repair received several calls for minor repairs and oil changes. However, they were also able to service one new customer’s BMW with a $3,000 repair. That one repair covered the cost of the entire campaign.
After the experience, the owner called to expand the marketing. He wanted to add the next closest 500 BMW owners. The modified campaign will now run for six months, alternating between the two groups. Since they have already covered the cost of both campaigns, all future business generated as a result of this mailing is profit.
This example shows how a direct marketing campaign should work. We defined the target market of BMW owners, developed a message tailroed to them, and reached out to them multiple times. As a result, new customers have come in, and with good customer service, will become regular customers.
We don’t yet have the Return On Investment (ROI) for this campaign, as it is only about halfway finished. The preliminary response shows promise, and the results have already paid for the entire campaign.
This campaign, though on the small side, shows what a direct mail campaign should do for your business. If you want help developing a campaign tailored to your business. I’d enjoy the opportunity to talk.
As a follow up to the “5 Tips to Increase Holiday Sales” post, here are more details about why a retailer should invest in marketing this season.
This year may be no different from any other. As a retailer, you should want to make money. To make money, you need to sell your products. To sell your products, you need customers. To find customers, you need to market. These are the basics of any business. This year the basics still apply.
If, as a retailer, you are thinking of cutting your marketing budget, your competition already has. You could cut yours and you’d both be investing the same amount and be on equal footing. Or you could maintain your marketing budget, or even increase it, and get more exposure.
If your main direct competitor cuts its budget by 50% and you maintain yours, your exposure is now 66%, 33% more than your competitor. If you doubled your marketing investment, your exposure would grow to 80% and be four times your competitor.
So, if you could get four times the exposure of your primary competitor for only twice your previous investment, doesn’t that seem like a good deal. Oh wait, is it starting to sound too good to be true? Well, this assumes you only have one competitor and you have both invested the same in marketing over the years.
The principle still applies. If most of your competition cuts their marketing, and you maintain or increase yours, your exposure is dramatically affected by their changes.
So, my advice to any retailer is, at a minimum, maintain the same marketing investment as last year. OR, if possible, increase it to take advantage of the increased exposure. The increase can be to expand your current and previous marketing tactics, or to try something new.
I’ve mentioned it before, the classic phrase in marketing is “I know I’m wasting half of my marketing budget; the problem is I don’t know which half.” It never hurts to try something new and different. At worst, you find a method that doesn’t work. At best, you discover a way to bring in more business than you every thought possible!
Marketing has always been part art, part science. The art component is the gut feel before anything is tried. It’s the mix of colors and shapes; the choice between abstract images and those of real people or items.
The other part of marketing is the science. For every marketing campaign, you should test and track every aspect. One of the easiest changes to track is the offer. Earlier this week, I highlighted the top 5 offers to include on your direct mail marketing materials. Here is a case study of one of my customers:
The client owns and runs an automitive mechanice shop. They do the typical oile changes, service maintenances, and diagnostic checks. On two of the mailings, we tested two offers. The first was a $25 off any service. It could be used for an oil change, so the total due would be $10. The second offer was a $50 off $300 service. The offer doubled, but was limited to a larger repair.
So, which of the two did better? What’s your thought?
Think about it. Would someone want $25 or $50 off their service bill? Would someone want to spend $300 on a service to get $50. Or, look at it as 72% off a $35 oil change versus 16% off a major repair.
So, have your opinion yet? $25 off any or $50 off $300. Which works better?
Would it surprise you to know the $50 off drew more customers? After thinking through it, and asking a few customers, it appears that more people were willing to fix a big problem for $50 as opposed to getting a more routine service, like an oil change.
So, even a single offer, like a fixed dollar off, can be tested against its own variations.
So, does that mean that you have to try every variation to find the best? No, not necessarily. The way to approach marketing is to use your best judgement, talk with your clients, as trust your gut. As you continue marketing, you’ll learn what works better. Each campaign, whether next week, next month, or next year, should be modified, even slightly, to see the affect on results.
And, it may help to consult a professional about where to start, so you can ramp up the learning curve.
Earlier this week, I provided five quick tips on helping retail store owners plan their holiday marketing. As an example, here’s a specific client I’m helping this season.
Nuance Gifts sells collectibles for holiday decoration. Their sales consist primarily of holiday villages by Department 56, like the Golden Swan Baker and Byers’ Choice carolers, such as the Boy with Stuffed Toy.
Avid collectors search the country to find the exact pieces they need to add to their displays. These are the ideal clients for these villages and carolers. The secondary group of clients buy these as gifts, either because they know an avid collector or would like to provide a decorative gift for someone they know.
So, for Nuance Gifts, we developed a campaign to reach the avid collectors, their primary audience. We determined there are roughly 500,000 collectors across the country. They weren’t ready to market to all of them on a massive scale, so we focused on a subset of the market. There is a campaign in progress currently to help ramp up sales for this holiday season. These collectors are invited to the website to find the pieces they are missing and see what this year’s series includes.
A secondary campaign markets to past customers and simply reminds them of the store and invite them to come back. Whether they purchased for themselves or as a gift, there is incentive to purchase again this year. It may be a percentage off or a future coupon. We’re testing a few variations to find the best offer.
At this point, we have no idea what the response will be. Over the next two or three months we’ll see how it worked. I’ll do my best to post the results here as well.