Two of Susan Lipschutz’s articles as they appeared in
Home Furnishings Executive

Direct Mail's Measurable Success		Organizing Cross Promotions
(download pdf)		(download pdf)

Direct Mail’s Measurable Success

For most furniture retailers, mass marketing is anything but scientific. Despite conventional rating services, there isn’t a reliable method of measuring the effectiveness of radio, television, or print, making it difficult to know which ads are being seen by whom.

Unlike other media options, direct mail is both scientific and measurable. This means that you can determine exactly how many sales result from your direct mail campaign.

Use Direct Mail to…

…track results. The best way to track your results is to have the consumer bring in the mailer to receive a free gift or special discounts. This not only lets you know how many people came into the store as a result of your promotion, but also what they purchased and where they came from.

…build relationships. Direct mail can also be used to reinforce your relationship with your existing customers. Never underestimate the power of a thank you note or small gift following a completed transaction. Birthday cards, gift certificates, and private sales are also good incentives to entice repeat business.

The Key is the List

Develop the list. When considering direct mail, the first thing you must develop is a well-targeted mailing list. Without question, your existing customers are by far the best source for new business. According to furniture industry research, 80% of all furniture sales come from existing customers. So if you’re not keeping your customer list up-to-date, you’re probably losing out on your best opportunity to increase sales.

Keep it Current. There are several simple steps to follow to make your customer list current. First, and most important, make sure that you automatically add the name of everyone who shops in your store. Consider taking the time to enter what they purchased so you can use that information to more directly target future sales promotions. For example, if you know that the average sofa is replaced every seven years, you can send a special offer to customers who purchased sofas seven years ago. Next, all customer files should be run through the NCOA (National Change of Address) file annually. This will automatically update the address of anyone who has moved in the last three years. Finally, all lists should be CASS certified and de-duped, insuring that only one piece goes to each house, and all addresses are complete and correct.

Build on it. Once you’ve gotten your own mailing list in good order, you can begin adding qualified new prospects. List companies like Polk, compile residential demographics that identify prospects by age, gender, income, location, home value, and presence of children. You can even add psychographic selects that index how likely a prospect is to purchase furniture. If you know who your customers are, you can select prospects that exactly match your demographics.

Probably the easiest and most cost-effective way to get new customers is to mail to “New Movers” in your area. The average suburban furniture store draws customers from a 10-15 mile radius. In that geography, there are approximately 400 new movers monthly. And most of them need new furniture! If you send a special offer to 400 new homeowners monthly and get a 2% response, you will have eight new customers coming in each month to buy furniture. That’s almost 100 new customers a year. Like other mailing lists, you can add demographic selects to the “New Movers” file to maximize its effectiveness.

Analyze it. More often than not, even sophisticated furniture retailers have only a vague idea of who their customers are. This is the most common problem with lists that haven’t worked well in the past. Not to worry. Target marketing companies like Market Mapping Plus have the ability to take your customer list and analyze its demographic trends. What this means is that it is possible to look at any customer and know that person’s location, age, sex, income, value of home, etc. By categorizing or “profiling” all the customers on the list, you can determine which new prospects are likely to shop in your store. Once this information is obtained, you can add names to your mailing list that match the demographics of your existing customers.

Create an Effective Promotion

Without question, a successful direct mail campaign needs a strong promotion. The trick is to identify what creative approach will work best with your customers and prospects. To create an effective mailer, you must accurately analyze your market and assess your competition.

It may sound simple, but a direct mail piece only has to give consumers a good reason to select your store. So what constitutes a “good” reason? The answer is value. Consumers want to know that when they purchase furniture, they are getting the best possible price, good quality, and reliable service. The problem is, all furniture stores make this claim. How can you distinguish yourself from your competition?

In furniture advertising, seeing truly is believing. Nothing will get the consumer’s attention better than showing them the beautiful furniture you sell in well-designed room settings. Color is essential and the quality of your mailer directly reflects the quality of your store.

In direct mail, consistency is everything. You need to develop a creative approach that is strong enough to visually identify your store without the customer having to see your name. And you have to make the commitment to mail on a regular basis. Ideally, this means mailing 4-6 times a year. If budget is an issue, select a smaller mailing list. Once you see that the campaign is increasing sales, increase your list proportionately.

Remember, consumers are bombarded with “junk” mail every day and if you want them to pay attention to your piece, the message has to be immediately apparent. Color postcards work particularly well in accomplishing this goal. They’re simple, affordable and stand out in the mail. The front of the card should tell the consumers exactly what the promotion is about, and the back of the card should let them know the details of the sale.

The best way to determine which promotion will get the best results is to use a direct mail company that specializes in the furniture industry. More likely than not, they are designing promotions for retailers across the country so they can tell you what promotions have worked best in the past for your type of furniture store.

If you are thinking of adding direct mail to your media mix, consider this. What is the first thing you do when you get home from work? If you're like most Americans, you open your mail. Combine this with the fact that direct mail can now specifically target consumers who are likely to purchase furniture in your store, and do it at the lowest cost per thousand. If you want to stay competitive and grow your business, direct mail is clearly one of the best media options to accomplish your goal.

Susan Fox Lipschutz is president of Dynamail Marketing. 800/883-DYNA (3962). For the last 13 years, Ms. Lipschutz has worked with furniture retailers in many varied markets to create direct mail campaigns that offer a very high return on investment. From concept through mailing, Dynamail will work with a client to implement a cost-effective direct mail program that produces results.

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Susan Lipschutz’s article as it appeared in Home Furnishings Executive

Organizing Cross Promotions

If you’re like most furniture retailers, you’re always looking for ways to stretch your media dollars. While buying remnant space at the last minute accomplishes this goal, it usually leads to poorly conceived, ineffective promotions that were developed without much thought to an overall advertising strategy.

So what is the best way to stretch your media dollars? Why not consider planning a series of coordinated cross promotions throughout the year that add co-op dollars to your budget and excitement to your advertising campaign.

Having spoken to furniture retailers throughout the country, I know that there is a high level of interest in adding cross promotions to advertising schedules. The problem is, you may not know what’s available or how you can get the programs organized.

Actually, organizing a cross promotion is a lot easier than you might think. All you need is a little imagination, a good sense of what motivates furniture buyers, and the ability to create a winwin situations with other businesses that share your goals.

Here’s a great example of how easy it is to develop a cross promotion that works. One of my clients in Philadelphia has a store located near a number of great restaurants. So we combined shopping for furniture with giving away a romantic dinner for two. This made it a lot easier to bring couples into the store, and thus more likely that they would make a decision the first time around.

We created an advertising campaign offering a free dinner with any purchase over $500. Then, we called several of the restaurants in the area and asked if they were interested in co-oping the promotion.

The deal was as follows. The restaurants paid for a percentage of the advertising campaign and we mentioned their restaurants in the ads. We decided on a combination of radio and direct mail for a total cost of $6,000. The furniture store contributed $3000 and each of three restaurants kicked in $1000 each. The furniture store gave away a $50. gift certificate good at any of the restaurants and everyone went home a winner at the end of the day.

I once suggested to a client in Sandwich, Illinois that he should offer new customers a free gift just for coming into his store. He replied, “That always works for me. I’ve found that my regular customers will walk a mile for a free gift and my affluent ones will walk five!

What does this tell you? Advertising is all about perceived value. An extra 10% off a sectional valued at $2000 represents a savings of $200. But more often than not, the customer would rather get a free area rug to go with their new sofa, an offer which is worth considerably less than the 10% discount. Rug stores love working with furniture stores to cross promote. Most people need new carpeting when they redecorate. Why not work out a special incentive with a local rug dealer and split the cost of advertising?

The possibilities for external cross promotions are limitless. The trick is to know your customers and what motivates them. One of my clients was a wine connoisseur and found a company that manufactured the finest wine glasses she had ever seen. She asked me if I had any ideas how we could cross promote wine glasses and furniture. We decided to host a wine tasting right in the showroom. We mailed out invitations to a list of wine enthusiasts along with the furniture retailers customer list, and got the glass company to split the cost right down the middle. The promotion was so successful, it became a semi annual event.

Using your imagination means looking around for the latest trends. If you sell wall systems, consider co-oping with an electronics store nearby to offer televisions, VCRs or DVD players. Remember, all good cross promotions have to offer both parties a mutually beneficial outcome- increased traffic and sales.

Often, your best sources for cross promotions are right inside your store. Regardless of how much your vendors might tell you that they can’t give you co op dollars because of the factory discounts you are already receiving, don’t believe it. They want to move their products through your store just like you do, and if you offer them a well thought out advertising campaign to sell their goods, more often than not, they’ll find the money you need to make it work.

If you’re thinking of doing a bedroom set promotion, why not offer the bedding at your cost. Then get the bedding manufacturer to pay for a part of the ads. The same is true for dining room promotions. Consider teaming up with a company that sells table pads and offer them for free or at a substantial discount with the purchase of a complete dining room.

For many of you, the problem is that you’re hesitant to pick up the phone and ask a stranger to enter into a business arrangement with you. But think of how you would react if a business person that you didn’t know called and offered you the opportunity to be involved in a cross promotion. You’d probably be thrilled, and chances are, the person you are calling will have the same reaction!

Once you see how far you can stretch your advertising dollars with simple cross promotions, you’ll be ready to consider setting up a full-scale vendor program. A vendor program takes considerably more planning, but the rewards are well worth the effort.

To set up a vendor program, you have to develop a complete creative and media campaign for a specific sales event including an exact cost for creating the advertisements and a fully negotiated media schedule. Once the planning is complete, invite all of your key vendors to a breakfast or lunch meeting and unveil your advertising campaign. If the value is there for them, you’ll get their participation. If the promotion works, the vendors will be asking you when you’re planning to do it again.

There are many ways that you can get started. If you work with an advertising agency, ask them to develop some ideas about how you can use cross promotions to increase you budget and make your promotions more interesting. If you do your own advertising, consider asking media reps if they have any cross promotions that would work for you. Of course, you can always use your own creativity and business savvy to create an effective cross promotion. It might take a little more planning and thought that what you’re used to, but in the end, you’ll be glad you put out the effort.