What’s your biggest marketing concern? For
Jim, who owns a small package plant in the suburbs of Chicago,
it’s money.
“Do you have any idea what a 5,000-piece
mailing is going to cost me?” he asked. Unfortunately, the high
cost of promotion coupled with a constant fear of failure have kept him
from experiencing any significant growth during the six years
he’s been in business.
Advertising doesn’t have to be a crapshoot.
There are simple ways to minimize risk.
One of my favorite movies is the original 1965
version of The Flight of the Phoenix starring Jimmy Stewart, Richard
Attenborough and Hardy Krüger as Heinrich Dorfmann, the German
aircraft designer.
As you probably remember, the survivors of a
plane crash in the Sahara desert have only enough water for about 12
days.
With no hope of rescue they reluctantly accept
Kruger’s idea to cut up the aircraft and use the parts to build
another plane, which will allow them to fly to civilization.
Of course, the plan itself is risky enough, but
when Stewart and Attenborough discover that Kruger designs model planes
with wingspans of less than two meters and has never worked on large
aircraft, their confidence is completely shaken.
At that moment, though, Kruger makes a key point
by saying that a model airplane is not a toy and stresses that the very
same principles which apply to large aircraft such as airfoil surfaces,
lift and drag coefficients, weight thrust equations and the entire
history of modern aviation all originate from models.
The question still remained: Would they trust the
calculations of a man who designed only small models and not full sized
aircraft? Their lives were on the line.
Many cleaners, such as Jim from Chicago, find
themselves in similar situations. They need to stimulate sales but
before they can do so they must weigh the risk and overcome their fear
of failure. Unfortunately, some never do and are destined to live lives
of quiet mediocrity, never realizing their true potential.
Build small models
The key to minimizing risk in marketing is to
build small models… like the German aircraft designer. The
principles that apply in the model can easily be applied to a
full-scale marketing plan.
Take Jim’s 5,000-piece direct mail project,
for example. I can understand his reluctance. After all, he’s not
exactly sure who his prospects are. He’s never written a word of
copy in his life… doesn’t know the first thing about
headlines or offers or lists or guarantees… doesn’t know
the pros and cons of first-class and standard-class postage and, for
that matter, he’s not even sure whether to use an envelope or a
postcard. Part of what it means to develop a working model has to do
with getting all of the above components in synch.
A good rule to begin with is this. Don’t do
a large mass mailing if you have a micro-sized budget. And don’t
assume that a single mass mailing will bring a flood of business to
your door. Usually it won’t.
If you have a lot of money to throw around, go
for it. But the focus of this article is to reduce risk, which means
making every dollar count.
Test small inexpensive mailings until you find a
formula that works. With continued success, that formula will develop
into a model. In time, you could have several working models depending
on what you wish to accomplish with any particular mailing.
For example, if your market is 5,000 homes, try
mailing to a list of 200 but don’t expect to make money on your
first mailing.
Even though direct mail is a proven and effective
means of marketing for drycleaners, it takes time to find the direct
mail package that works best for you. Don’t get discouraged if
your first mailing doesn’t make a lot of money. Keep trying. Keep
it small… but keep trying!
What’s your break-even?
Know your break-even point. Successful direct
mail campaigns typically get a response rate of one to three percent.
Know how many responses you need to break even on your mailing costs.
Let’s say you need two responses per
hundred. If you do a 200-card mailing, you’ll need four responses
to break even. If you get only one response or none at all, it’s
a good sign the mailing is not working and chances are, it won’t
work no matter how many you mail so make the appropriate changes to
your model.
Your list is the most critical mailing component.
An accurate and up-to-date list will bring a better response more
quickly than if you make changes to the mailing piece. Also, remember
that your house list (those customers who currently use your service)
will yield a much higher rate of return than a prospect list will, so
always keep a good list of past and present customers.
Work at the top
Work your best lists frequently. Generally, your
top tier customers will make up your best list. This is where most of
your profit lies so don’t be afraid to experiment extensively in
this area. Even a small tweak to a top-tier customer control model can
increase response tremendously.
Focus your message by being specific and to the
point, especially if you are using a postcard format, and be sure to
give a call to action.
A call to action makes the response to your test
model easy to calculate. Coupons and offers give your target audience a
reason to act soon and coupons with redemption dates give your offer a
sense of urgency.
Experiment with each of these components to see
what brings the best response.
Keep testing small. When you are confident that
your model works on a small scale then you can open it up to a larger
application. Test small… fly big!
My friend, Jim, was so overwhelmed at the thought
of having to reach his target audience of 5,000 all at once that he did
nothing and consequently gained nothing.
If, instead, he had regularly made contact with
at least 200 people every two weeks, he would have sent out 31,200
mailings.
Just ask a cleaner who actively promotes his
business what a difference 31,200 contacts makes to the bottom line.
Best of all, Jim’s budget would have been easily manageable at
just under $120 a month, or about $1,400 a year.
Who can’t do that?
