Case # 1 Developing a Viable Email Database
Recently, a furniture business outside of Chicago came to us to develop an annual direct mail campaign for his three showrooms. When I asked him about him how many names were in his customer database, he knew the number with surprising accuracy. When I asked him how many email addresses he had for those customers, he paused and said very few.
The critical challenge he faced was to develop an opt-in database of email addresses comprised of both existing customers and likely prospects. I emphasized that if he didn’t have a viable email list, he could be certain that his marketing savvy competitors did. The clear advantage and importance of this list going forward is to have the ability to send sales, promotions and coupons online at a fraction of the cost of traditional media. Like many other furniture retailer, our new client relied on his sales staff to capture email addresses with limited success.
I suggested that the best way to compile an email list would be through direct mail starting with his existing customer list, and then expanding to highly targeted prospects using a combination of demographic and psychographic selects.
In order to be cost efficient, it was important that the postcard serve more than one purpose, so we started by creating a hard hitting promotion that would drive traffic immediately into his showrooms. What was different about this postcard was that customers would have to go to his website and enter their email address in order to download the coupons or special discounts he was offering during the sale.
When we analyzed his customer list and the likely prospects in his area, we came up with a working database of about 50,000 names. For budgetary reasons, the cost of mailing to the whole list at once was prohibitive so we divided it into five groups of 10,000 each. Then we mailed them for five consecutive months.
Our client got a 6% response to the promotion and captured over over 8,000 email addresses. Now, all of his postcards require going to his website and providing email addresses to download sale information. His list of email addresses continues to grow at a steady pace. Starting in September, we are developing a blast email campaign to augment his direct mail program.
Case 2 – Getting younger customers to try a restaurant that caters to an older clientele
In suburban Philadelphia, there is a charming restaurant that once was a mansion where you might expect to see Katharine Hepburn in her prime. The food is delectable and the ambiance is exquisite. The problem is that, while there was an influx of hip, new restaurants in the area, the average age of his patron was seventy-five. Our challenge was to attract a younger crowd to his restaurant.
We started by designing a hip postcard using contemporary tones and a blurred image of a young woman in motion with a drink in her hand. One the back, we highlighted eclectic dishes using enticing descriptions of items on the menu. Finally, we put a buy one get one free coupon on the back and mailed it to 10,000 prospects in the immediate area, aged 35-55 with a combined household income over $125,000.
The promotion was an overwhelming success. Over the next 60 days, customers brought in over 350 cards. Since the coupon was only good for a free main course, the offer was still profitable because many of the diners ordered drinks, appetizers and desserts.
The restaurant captured new customers’ postal and email addresses. This enabled them to send special promotions to the list on a regular basis. Once word spread that the restaurant was a great experience, the age of the customers was significantly more varied and bookings for parties, bridal showers, sweet sixteens and rehearsal dinners increased dramatically.
Case 3 – “Unbelievable” and “Incredible” Promotions
Several years ago when everyone was qualifying for a new mortgage or refinancing their homes with questionable credit, a mortgage broker in Vermont called us to do a postcard to be in-home in early December, just in time for the holidays. Competition was fierce, and he wanted to grab as much of the market share as possible.
Our client made about $3000 per mortgage closed so he felt that he had a lot of room to offer a pricey promotion as an incentive to use him. He came to us with what I considered to be a brilliant idea: give away a Dell computer valued at about $750 and still walk away with a $2,250 profit.
We decided to print 10,000 postcards as a test. I was so certain that he would get an overwhelming response, I suggested he limit the mailings to 2,500 at a time. To my utter shock, he got less than ten responses from the first mailing. We changed the list parameters and got the same limited response.
While the promotion was ultimately a moderate success because he didn’t need to sell many mortgages to make the mailer profitable, in my mind, it was a failure based on my expectations.
After giving the project serious thought, I think I determined what the problem was. It all came down to credibility. Consumers are jaded by overblown deals that seem too good to be true, and usually are. In this case, they simply didn’t believe that a mortgage broker would give away a computer with no strings attached so they didn’t even bother to call to find out more about the deal.
This is an extremely important lesson for retailers to learn. “Incredible” and “unbelievable” sales can be, and usually are, just that. Sophisticated consumers can sniff out a rotten deal a mile away. Sometimes even when a great deal is legitimate, it is hard to convince customers that the deal is actually real.
Case 4- Redirecting Advertising After the Recession
The owner of a small chain of high end women’s clothing stores located in south Florida came to us to help them develop a new postcard campaign that would re-center the advertising they had developed during the downturn in the economy over the last few years.
During that time, in order to equal their competitors’ advertising, they felt forced to have sales that offered storewide savings of up to 70% off. While this allowed them to keep their doors open, it only enabled them to be marginally profitable. The challenge was how to create compelling promotions that would drive traffic into their stores at a price point where they could make money.
Fortunately for them, the merchandise in our client’s stores was both exquisite and fairly priced. Their highly experienced sales staff was known for being able to coordinate wardrobes for their fashion forward clientele. The owner knew that once she got customers in, the merchandise practically sold itself.
We decided to design a postcard with a multi-layered promotion approach. It is probably no surprise to you that the four most important letters in the alphabet for retailers are F-R-E-E. With this in mind, we offered a free accessory to complement any purchase over $250 including belts, scarves, and costume jewelry. In addition, we offered buy two and get one free on pants, sweaters, dresses and outerwear. Finally, we suggested that our client contact her vendors to see if they would pay for part of the mailing if she featured their products on the postcard. Not only did she get the vendor money, but they also offered her significant discounts on some of their overstocked inventory. The sale was a huge success and we planned a series of postcard mailings throughout the rest of the year.