So many retailers I know employ marketing campaigns that don’t make any sense. They jump feet first into initiatives that cost a fortune, yet have no way to measure whether it’s been successful or not.
This retailer spent over $3,000 on a marketing initiative and didn’t know whether it worked or not (yes coupons came in, but did they cover the cost of the campaign? No one knows.).
THE REAL WORLD RETAILING TAKEAWAY
Create a plan for your marketing effort.
Define your target — Narrow the focus on the customers you’re trying to reach to mimic the demographics of those customers shopping in your store. There’s no reason to reach a zip code that’s full of senior citizens when you’re selling waterskiing equipment. Secondly, are you going to send it to your existing customers to get them to shop more often, or are you trying to create a larger base of customers and are sending it to prospective customers? Or both?
Determine which media best reaches your target — Chances are, as a small retailer, you’re going to do direct marketing or email campaigns since most other media such as TV, radio, newspaper and magazines will be too expensive. Make sure whatever you choose, that you’re only hitting the households that make sense for your business. Do a little homework….if you have a database, find out which zip codes your customers live in, what’s their average age, are they male or female…become smarter about the demographics of your customer. That will help you make smarter marketing decisions.
Decide on the offer — Once you’ve decided on the media vehicle, create your offer. Make sure it’s compelling enough to drive customers to your store. If you’re going to offer a discount, make sure there’s a minimum threshold (e.g. save 20% on any purchase over $75). And make sure there’s a deadline so you move people to come in and shop. You should only give people 3 weeks or so after the mailer hits their home to come in. Of course, if they come in after that expiration date, you still should accept the coupon. After all, sales are sales.
Set a goal or response rate — Make sure there’s a coupon or an email or something your customer has to bring in so you can track the results. If you’re mailing a postcard to 1,000 homes, set a goal for how many you want to get back. You should only expect 1-3% return rate.
Measure your results — Make sure there’s a way to track the results. Depending on how sophisticated your systems are, you can put a bar code on the coupon and track it that way. Or if you’re more basic, you can track it by hand. Either way, you’ll want to capture the amount each customer spent. Once you have that info, you can add it all up and determine whether you reached your goal as well as covered your costs. If you get a 2% response rate on 1,000 mailers, that’s 20 people who bring it in and buy. Assume that they’ll spend your average of $50 (Or whatever your average transaction is) and you get $1,000 in sales (Plus you hopefully pick up 20 new customers). Multiply that by the number of times your average customer shops each year and you can see the long-term value of this marketing initiative. Or maybe not and if so, next time you try something different.