May 2, 2014
Who doesn’t love the convenience of a bank ATM card, especially when you need cash quickly? One of the most effective ways to produce cash for your business is to utilize your preferred customer mailing list with a private sale. I recommend mailing to use your preferred customer list at least once a quarter on average. Why? Because your most loyal customers respond best when given a good reason.
Your Customers Know and Love You
Aside from the customers you’re serving right this minute, your preferred customer list is one of your most valuable commodities. Until a shopper buys, they are not your customers but rather your competition’s. When a customer purchases from you that is the first real measure of relationship selling. When relationship selling was all the rage several years ago, I differed. The relationship, I countered, really begins with their purchase. Until then you are building rapport. Once they buy from you, the real relationship starts and needs future care to maintain loyalty. In our experience, a previous purchasing customer will respond, on average, twice as much as a mailing to a demographic list. We know this because we measure closing ratios.
Consider Demographic Lists
Occasionally my clients have done a fantastic job of producing and growing their mailing list. If the list is too big for one mass mailing, stagger your mailing over several days or weekends. If you do not have a store list, demographic lists are an option, although your ROI is usually not as good. Demographic lists can also serve as the basis for building your store list if it is small. Chart the zip codes where your preferred customers live. People in the same areas usually have similar lifestyles want and needs, plus they will have seen your delivery truck in their neighborhoods. You can then rent mailing lists based on household incomes that match your merchandising level. Demographic private sales also work, just not as effectively as your previous purchaser.
Private Sales Are Measurable
The challenge of today’s marketing is measuring your results. The first rule of management is, “You can only mange what you can measure.” With the proliferation of social media, the decline of newspapers, and the dilution of network television, direct mail is still effective and, more importantly, measurable. You can measure direct return by the customer traffic you receive during a private event. It is even more measurable if you include some form of coupon. Then the ultimate measurement is the percentage and number of purchasers. I highly recommend sending email blasts and Twitter messages reinforcing your private sales and reminding customers to look for their private letter. Always evaluate your results so you can improve your next mailing. Once a year send your list first class; while it is more expensive, it allows you to get your returns so you can clean up your list.
Mailing Frequency
Some retailers are afraid of saturating their private list with too many events. But remember, customers are in the market for new home furnishings throughout the year. Research shows that when a customer purchases from you, 50 percent are in the market for an additional item within the next year. As only four percent of home furnishings customers are in the market on any given week, it would take 12 mailings to reach the above 50 percent over a year. As my clients results continually improved, we kept increasing our private sales because of the huge return. While a monthly mailing may be cost prohibitive, our clients have found success with once-a-quarter mailings.
Sneak Peeks to Major Events
Before all major sales events offer your preferred customers a preview invitation. They love the special “loyalty” attention. When we start with a private sale it usually ensures a great kick off to our events, giving sales momentum to the public phase. On bigger events that last for 60 days or more (such as relocation sales) consider a second mailing towards the end.
Timing and Urgency
Timing is very important. In most markets the best time for a private sale is heading into the weekend. The exception is a special one-day sale, which could be offered virtually any day of the week. The risk with such a limited time frame is the possibility of running into a weather or other unforeseen emergency. Generally, Thursday, Friday, and Saturday are the best days for sales; if you are open Sundays, consider Sunday as well. Add the element of urgency with terms like “Three days only” or “36 hours,” rather than open-ended terms like “Hurry, limited time!” Remember the more specific you make the urgency the better the results.
It’s Your Business ATM
Remember, just like an ATM, you must have deposits in the account. There are production costs, postage, and planning. Always add your new customers to your list. When gathering their information, ask for their email and Twitter addresses to let them know about sneak peek and private sales. Encourage new customers to like your store on Facebook. Put your customers on your mailing list so you can bank on them and get quarterly cash from your new private sale ATM.
Philip M. Gutsell, president and owner of GutSELL & Associates, consults with home furnishings retailers on marketing, advertising, motivational sales training, and strategic planning. www.gutsell.com.