Post a new topic
    13 Replies Latest reply on Mar 8, 2009 4:45 PM by FlAdMan

    Marketing in a downturn

    FCPainter Adventurer
      Typically, this time of year my company is preparing to spend $50,000 on direct mail to generate estimate leads for the summer. With the economy souring (soured), I am trying to figure out how to most appropriately scale back. Typically, 60 percent of my business and most of the early season work comes from this mailing.

      What would you guys recommend:

      1. Do not mail at all (batten down the hatches for a brutal year)

      2. Mail less, but still mail (it will be bad, but not horrendous)

      3. Deploy the money in a less effective but more bit by bit manner (newspaper ads, online ads, flyers)
        • Re: Marketing in a downturn
          LUCKIEST Guide
          Marketing in a downturn Want to try email Marketing??

          *I am a SCORE Counselor and last week we had a presentation and slide show on
          Email Marketing.*
          *Without mentioning the company's name, the presentation talked
          about staying in front of your customers, Communicating with them regularly,
          Reminding them of your value, and setting yourself apart from the competition,
          with Email Marketing.*

          LUCKIEST
          1 of 1 people found this helpful
          • Re: Marketing in a downturn
            Lighthouse24 Ranger

            Who makes up your customer base (i.e., who receives these mailings)?

            If your business depends mainly on new construction and/or commercial contracts with builders or developers, then I'd be inclined to scale back on mailings and get more personal in marketing to them -- so you can more directly determine who will have work and who won't in the year ahead, and then focus your efforts on those who are the most likely to hire you.

            On the other hand, if your mailings are going to homeowners and a substantial part of your business is custom/private jobs, then I'd suggest that you NOT scale back on an advertising method that has proven to be effective with that clientele in the past. Provided you have a good direct mail piece and a good reputation, it's not a foregone conclusion that a weak economy will drive down that segment of the business. In fact, it should drive out weaker competition -- so it's really a time to demonstrate your strengths and sort of "help" that process along if you're good at what you do.

            Yes, if there were 1,000 jobs up for bid last year, there may be only 700 this year -- but if there were 100 painters actively advertising for those jobs last year, and only 40 are advertising this year, you could actually have a more profitable year if you're among the 40. So I'd be cautious about scaling back there. Good luck.
            1 of 1 people found this helpful
              • Re: Marketing in a downturn
                Newbie
                I think this is excellent advice. The only thing I would add is assuming that you are advertising for the custom/private jobs consider doing an in depth profitability analysis of the lead generation. There has to be variation of demographics in that large of a mailing which could impact your strategy. With that analysis and consideration of current events and stimulus incentives you may fine tune your approach to even larger success.
                1 of 1 people found this helpful
              • Re: Marketing in a downturn
                mkting Newbie
                I looked at your profile to see that you own a residential house painting company.

                This is a tough question that cannot truly be answered in this forum because there are too many alternative situations to consider. Well, it cannot be answered. We provide our thoughts, you do the gut-check and make a decision.

                The three scenarios you present are reasonable but I am going to attempt to give you more to consider.

                1. You "know" that "everyone" will be putting off residential painting until the economy improves or they cannot avoid it. Your revenue is going to drop this year. As much as 60 % of your seasonal work usually comes from this mailing. If you don't mail, your revenues are sure to drop by approximately 60 %. You are guaranteed to need a way to make up that revenue elsewhere. But you keep your $50 K.

                2. Direct mail typically generates a response of less than one percent. From that pool, a fraction will become customers. I am surprised you have such luck with it. Cutting your list may cut your response more than you imagine. One mailing alone brings in more than $120 K a year for you, if I remember the numbers from your profile correctly. I'd love to know how you are managing your list - I am building one myself.

                3. Now is not the time to deploy the money in a less effective way. If anything, you want to be more effective, given your stated concerns. There may be some logic to spreading out your mailing. Times could get better. If times get better, people may be more receptive to your offer.

                Some things to think about.

                1. If your financial situation is strong enough. Go on the offensive. Your competition may be battening down the hatches. They may not send out a mailing this year. You may pick up some new clients. The company that handles your direct mail campaign may be willing to extend the reach of your campaign for the same money - they may be willing to do more for their revenue in this economy.

                2. Take a hard look at past data and try to refine your list. Can you do a better job defining your target market? Do certain zip codes perform better for you? Do you have any other demographic data you can use.

                3. Look at your old/current clients (current customers are cheaper than obtaining new customers). Look for the people who may be "over due" for a paint job. See who may be thinking about getting the job done. Try to get them to "Yes" by sweetening the deal with incentives - offer more service for the same price (keep the discounts in you back pocket as long as you can).

                These are things off the top of my head. I hope things work out for you this year.

                Drop by my site. Shoot me an e-mail. I'd love to know more about how you are managing your list.

                http://DanridgeAndAssociates.com
                • Re: Marketing in a downturn
                  Analysight Newbie
                  FCPainter,

                  Perhaps the trick is to make your direct mail approach work more efficiently. First, how many people receive your direct mailing? What has typically been the response rate to your mailing? Do you send the exact same direct mail piece to everyone? And do you keep track of whom you send your direct mailings, who responds, and how much they spend? Do you also have information about your customers (geographical, income, etc.) All of this information can help you enhance the performance of your direct mailing campaign in two ways:

                  Statistical modeling
                  You can build a model to predict which customers are most likely to respond to your direct mailing. When you have an idea of who is most likely to respond, you can reduce the size of your mailing without greatly reducing the number of people responding to the mailing. Hence, you don't waste money mailing to people who won't respond any way.

                  Segmentation
                  Look at the data you have on your customers. Can you break your customer base into different groups? Perhaps one group of your clients is affluent and young; another may be middle-aged working class. These two groups will have different types of homes, and hence different painting needs. You can create two direct mail pieces, one that targets the younger wealthier group, the other, the older moderate income group. This alone can give you a higher response rate on your direct mailing than if you sent the exact same mailing to everyone.

                   

                  Analysights has extensive experience in direct mail segmentation and statistical modeling for direct mail, I would be happy to talk to you at greater length to see how I might be able to help you. You can visit our web site at: www.analysights.com, for more information.

                  Alex
                  • Re: Marketing in a downturn
                    FCPainter Adventurer
                    Thanks to all for great input. Here's my thinking - I think our direct mail (and yes, I disguised the numbers a bit) has been a big success because a) we have a very unique mailer it is the size/shape of a CD/DVD with very cool graphics so people can not help but check it out - we have had people put them in a drawer and call us a year later and b) we mail very targeted zip codes.

                    so, I am going to do the mail again, but we are going to double-down the zip codes we have always seen the best results in, the ones that we think have the best wealth and the ones we think we have the most opportunity.

                    I do want to be a bit aggressive because I think others may not market.
                    • Re: Marketing in a downturn
                      FCPainter Adventurer
                      Thanks to all for great input. Here's my thinking - I think our direct mail (and yes, I disguised the numbers a bit) has been a big success because a) we have a very unique mailer it is the size/shape of a CD/DVD with very cool graphics so people can not help but check it out - we have had people put them in a drawer and call us a year later and b) we mail very targeted zip codes.

                      so, I am going to do the mail again, but we are going to double-down the zip codes we have always seen the best results in, the ones that we think have the best wealth and the ones we think we have the most opportunity.

                      I do want to be a bit aggressive because I think others may not market.
                      • Re: Marketing in a downturn
                        FlAdMan Adventurer

                        You must focus on marketing your business online. It can be done affordably and produce the same results that thousands of dollars spent on PPC will yield. It really works! see for yourself, http://www.freewebs.com/cheapadz