Business Building Ideas
September 2006, Volume 1, Issue 8

Dear Friend:

I find that every September I'm a bit more tuned in to what needs to be done. The cooler, crisper air serves as a reminder that winter is coming and I need to dig right in to what needs to be done before the holiday season is upon me. It is an invigorating time of year.

It is also the perfect time of year to be marketing for end-of-year projects and to lay the foundation for the year to come. Over the summer you worked on - or perhaps even completed - your marketing strategy and now's the time to implement it to help grow your sales. This month's article will help you do just that with tips and advice on how to use one of the most cost-effective, business building marketing programs available – direct mail. So, let's get started!

- Walt Stoeppelwerth, HomeTech Information Systems, Inc.

P.S. Have you taken the necessary steps to safeguard your computers? In case you missed it, last month’s article shows you ways to protect your computers and data. Click here for the article. And with computer safety in mind, this month's HomeTech ADVANTAGE Tip is on backing up your HTA files. Read on!

In This Issue

Feature Article

How to Make Direct Mail Work for You

If you read the June 2006 issue of BBI, you know just how critical a strategic marketing plan is to growing your remodeling business (see BBI issue June 2006). In the next three issues of BBI, we'll be a bit more tactical and provide you with tips on how to make the most of the marketing tools you'll use to implement your strategic plan. This first issue will look more closely at the elements of a direct mail campaign and what you need to do to make direct mail successful.

What is Direct Mail?
You can probably answer this question pretty easily yourself. It is the letters, postcards, envelopes and boxes you receive in the mail. Most marketers of products and services will employ at least one direct mail option for lead generation and/or customer retention programs as they can prove to be well worth the effort.

The Three Elements of Direct Mail
Every direct mail campaign has three variables that, together, will determine the success of that campaign. They are:

1. The List: Who is receiving the campaign?
2. The Offer: What is stimulating response?
3. The Creative: How is the campaign being "packaged"?

If these three variables complement each other, then you have the components for a successful campaign. If the campaign does not bring in the results you want, fine-tuning one, or all three of these variables, can turn an unsuccessful campaign in to a successful one.

The List
If you don't already keep a current list of customers and prospects, start now. For anyone who contacts you, collect in one place the details of that "prospect" including their address and phone number. Add this group of people to anyone you have ever done business with. This is now your internal list of customers and prospects and it is a great list for direct mail campaigns.

An external list is a group of names that you rent or purchase. The names on this list have most likely never been in contact with your organization and probably don’t even know that you exist. You can rent external lists from any number of list rental agencies; check out Edith Roman at www.edithroman.com as an example.

Identify the right list to mail to
You have an internal list, now what? You need to segment, or determine "like factors," across your internal list. Like factors that you might look at include income level, home ownership status, age of home, magazine(s) subscribed to or neighborhood lived in for example. You should also segment your list by relationship to you: Have they done business with you already or were they inquiring only (an "internal prospect")?

TIP: Look back over the projects you have completed in the past few years. Try to identify categories of projects and profiles or like factors for your customers who have completed these projects. This would give you a good understanding of how to segment your internal list.

Picking the right list for your campaign
You should ask yourself questions to help define the list you want to mail to:

  • Do you want to get in touch with customers you have worked with before?
  • Are you mailing to an entirely new group of prospects?
  • Is this new group of prospects new home owners?
  • Is this new group of prospects homeowners who have been in their property less than 10 years, 10 years or more, 20 years or more?

Once you've figured out the profile of the group you want to mail to, you can segment your internal list based on this profile or rent an external list of names that match this profile.

The Offer
You've defined your list and you know that you want to get in touch with a new group of prospects. You have further segmented this group into a list of homeowners who have owned their property for more than 10 years. Now you need to determine what would be the most compelling offer for this group of prospects. Here's where you draw upon your experience to identify what this group will most likely respond to. Is this group of prospects likely to be in the market for a kitchen renovation or a room expansion? Are they looking to make improvements for personal enjoyment or for increasing the value of their property?

Since you've reviewed your customer list, let's say you identified that homeowners who have owned their property for more than 10 years are completing projects to make the home more personally enjoyable. Projects that customers with this profile have completed in the past have been basement refinishing, kitchen renovations and master suite expansions for example. Creating an offer around this type of project would most likely be appealing to a new group of prospects (the list you identified) who have a similar profile to your current customer base. Based on your customer review it would probably not make sense to create an offer around a project that is done purely to increase the value of their property since your customer history shows you otherwise.

Regardless of what you offer, your offer needs to:

  • Be personal – focus on the prospect, not the product/service you are marketing
  • Be clearly stated - succinctly
  • Provide a way to respond – phone number, email address

TIP: Whatever offer you develop, adding a "free" element will most likely increase the response to that offer. "Free estimates" for example, may entice someone to call you to inquire about the offer (and you know that you can quickly and easily create estimates with CostEstimator.com!).

The Creative
Creative, loosely, is how you are going to deliver your offer to your list. In direct mail, this can be a postcard, a letter or a dimensional mailing ("dimensional" is a mailing that is not flat – a box or a tube for example.) Creative also refers to the visual representation of the offer. Many factors will affect your creative and its appeal to your intended audience. Keeping with the examples from above, let's say you defined your offer to be something like this:

"You've worked hard over the years and now you want an area of your home dedicated to pure enjoyment. With a finished basement you can build that home entertainment area you've always dreamed about. Call us at 1-800-XXX-XXXX for a free estimate on how we can make this dream a reality."

How might this offer be visually represented? You want your prospects to identify themselves in the creative you are mailing. Pictures of smiling, happy, mid-aged people enjoying finished basements with home entertainment sections would support this offer and allow the prospect to see themselves in their finished basement.

TIP: If you tie in your "free" element to be specific to the offer it will most likely increase the response rate even more. "Free ABC speakers with any completed basement refinishing project" might be offered here. The cost of the speakers is determined by you and is minimal in relation to the entire project quoted. Creatively, you would add a picture of the speakers to the offer.

40, 40, 20
Chances are you might have a brainstorm about an offer. That's great! From determining the offer, you could then most likely identify the like factors of a group who would be receptive to the specific offer. The order of "list" and "offer" are interchangeable. However, you should probably develop the creative last. In general, success of a direct mail campaign is influenced 40% by list, 40% by offer and 20% by creative. Of course there are direct mail campaigns that have completely dispelled this general formula, but we'll look more closely at this in the next issue of BBI. Stay tuned!

Additional Resources
Check out the following books for more on direct mail:

HomeTech ADVANTAGE Tip

Backing Up Your HomeTech ADVANTAGE Data

Did you know that you can back up your HomeTech ADVANTAGE data in six simple steps? By backing up your data you can save hundreds of keystroke hours if data is destroyed by unlikely events such as fires or power outages.

For details on backing up your HTA data, Click Here.

Did You Know?

The housing sector accounted for a full point of last year's 3.5 % GDP growth. And by its broadest measure (including real estate commissions, spending on furnishing and yards, etc.), housing represented a record 23% of the nation's 12.5 trillion GDP in 2005.

Source: The State of the Nation's Housing 2006, page 6,
Joint Center for Housing Studies of Harvard University

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