Marketing Plan - Direct Mail

[Andy]

I?m working on my marketing plan for when I open our car wash next year. I?ve decided to use direct mail using large, full color postcards. We have a total of 30,000 households within a 2.5 mile radius I?m trying to decided between these two offers?

1. I?d send 10,000 postcards per month offering $2 off our premium automatic wash. Each household would receive a postcard once every 3 months for 1 year (a total of 4 over the year).

2. I?d send 2,500 postcards per month offering a free premium automatic wash. Each household would receive only one postcard during that year.

Of the two options listed above, which do you think would drive more business? Your thoughts and opinions would be greatly appreciated. Thanks.

 

[raisetheprice]

I think number 1. I don't think you should give away anything totally, but big discounts. People like discounts...look at black friday, they'll stand in line in the wee hours of the morning to get great deals on electronics, clothing, etc. Also, people forget that you gave them a free wash a year ago. But they'll remember you at least 4 times a year with plan #1. Also, you reach more people, 7500 more.

 

[bigleo48]

I agree with 'Raisetheprice', completely free brings a lot of the wrong kind. Discounts is the way to go. For my wash, I had a 40% off my top wash for two weeks...had them lined up out the door and covered my expenses.

 

[rph9168]

The only time I think free washes is a viable approach is when a wash first opens. It gives potential customers a "free" trial and gets the business going. After that, if you have to give away washes to get customers something is really wrong with your operation and marketing. Discounting top packages works to get customers to upgrade and may bring in some new business. Even that should be regarded as a short term program except for frequent washer programs.

 

[Andy]

Great feedback!! Thanks guys!!

You’ve pretty much confirmed what I was thinking. I was leaning toward the coupon offer to hopefully reach more people and help recoup the expense of the marketing. The down side…

1. It will cost me 4x more to send the 10,000 discount postcards over the 2,500 free car wash offers.

2. The redemption rate on the coupon promotion will be a lot less then the redemption rate on a free car wash offer. Those with experience with direct mail, what is the average redemption rate of car wash coupons sent by direct mail?

3. I feel that offering coupons on a regular basis will de-value the price of my wash. For example people will tend to rely on those coupons and I feel they won’t wash their car unless they have one. For example, think of it like ordering a pizza, I don’t order a pizza unless I have a coupon. What are thoughts on this? Do you guys find this to be true?

 

[rph9168]

The redemption rate of a direct mail depends largely on the offer you make. The greater the discount, the better the chance for a decent redemption rate. The last I looked into it redemption rates for bulk direct mailings is not really that great (less than a 2% average). I think the bulk direct mailings offer a better rate if it is available to you. In some cases you can buy a target list that includes a better sampling for the coupons like average household income or two+ car families.

Unless you are getting a really decent rate I would probably look into another means for your coupons. Is there a local paper that you might be able to put a coupon in? Some operators have had success with the backs of receipts at super markets. Are there local businesses like restaurants or c-stores you might do some cross marketing with? A really inexpensive idea is to put a sign in a local store giving a discount with a receipt from that business. Your only expense if the cost of the sign and any cost involved with the merchant. If you pick the right business you might get some decent action.

 

[Chiefs]

Andy, Here's what I've found
#1 Define your goal - Is it simply to get the most coupons redeemed or, is it to make new customers. The free wash will provide you the greatest rate of redemption. If your an established wash, then you may want to focus instead on making customers of those new to your market area. Whether you are a new wash or just a new owner, the key to get volume and exposure. Here too free washes will make the greatest impact. The coupon trap forces you to continue to spend advertising dollars to attract (all too often) the same customer.

I've used a company called Moving Targets over the years. They send a single piece, direct mail letter to poeple new to your area. The offer is simple, a free, no strings attached car wash. Cost was $1.39 each. We achieved a redemption rate of 16%. Currently we do our own direct mail piece mail it to those new to our area with the help of a company called Angies List who we get the mailing list from. We print out the promotional piece with the coupon attached and mail it ourselves. This has gotten the cost down to 60 cents apiece. When they redeem the coupon we give them a letter of welcome which tells them more about our facility.

I would rather reward them with a discount in exchange for their loyalty. This can be accomplished through a frequent washer program, book wash program and a monthly club card promotion. These enable you to give price breaks to those deserving of one. About 28% of our annual revenue comes to us through book wash and club card sales alone. For those who don't want to pay for the 5 wash book which saves them $10 ($2 per wash), or the club card which saves them $50 a month on average, there's our frequent washer card which gives customers 55 weeks to wash their car 10 times to earn a free wash. That's just one wash every 5 weeks! This is what they must do to meet our definiton of frequent. For those that don't, well, you can lead them to water....

#2 Don't forget soft advertising. Most important of these is getting involved in the community. Sponsor youth sports teams, advertise in the local high scool sports program, sponsor your community home days carnival. When you participate in the community it comes back you bigtime.

 

[Chiefs]

#3 If you do advertise, do it during your busy season, not your off season. I've found that off season discounting is usually as "wash", meaning that the revenue generated by the extra volume does little more than cover the cost of the advertising. While it may sound counter-intuitive to advertise/discount when your wash volume may be at its greatest, but it is also the reason why you'll get the greatest repsonse - the need for your service is at its peak - and the best chance to add customers to your base. I think most of those off season coupon users come from people that would already use your services with or without the coupon.

#4 Don't forget about your existing customers as you strive to build volume and attract new ones. Make yourself different from other washes in town. Give your customers something no one else does like a customer imrinted litter bag or moist disposable towel to wipe their doors and dash. Try educating your customers with maybe a newsletter informing them of the challenges their vehicle faces from season to season.

#5 Be ready for all of the new customers. Attracting them is one thing, keeping them is another.

 

[Waxman]

Get the wash open and 'dialed in' before you offer the promotions and get big lines. Your new car wash will take some adjusting, tweaking, fiddling around and lots of testing beore you will be ready to serve long lines of customers there to try (and critique) your wash for the first time. I'd say wait a month to offer any promotions and to give yourself time to learn how to best achieve the best car wash for your customers. Cause it ain't that simple! Just been there, just did that!

 

[pitzerwm]

Another thing to consider, when I get an "offer", the first thing that read is the small print, the more small print the more likely, I'll never bother.

 

[Charles Ho]

This is what they don'y tell you about coupons. Your redemption rate is directly porportional to the offer. The hardest part of the salesman's job is not getting you to buy advertismeent but having you giving up as much as possible for the first printing. Once you had a taste of the initial redemption rate, you're hooked for life. It's like an addiction.

A BBQ chain restaurant has been giving away 2 for 1 coupons for years. I can't cook the same for less money than they charge. So they get long lines on weekdays keeping employees busy. Is this what you want?

DM List quality has everything to do with your success as well. are your coupons targeted at established residents or newly moved neighbors? How recent is "new"? New to your list may be sixth months old in the neighborhood. Depending on offer and industry, some prefer to have the DM piece arrive while prospects are still unpacking. While others may rather wait for them to be settle in at least three months before bombarding them with DM.

If you are using DM targeted at new movers, add this question when they redeem the coupons: "How long since you moved in?" You'll learn some interesting facts to help tweak your DM success.

Been There. Done That. Still Doing It.

 

[brightshine]

Direct Mailings

I just opened my location 5 months ago. My closest competition is 5 miles away. I was going to do a mass mailing and offer a discount to get customers BUT after doing some numbers it didn't make sense to that.

So I opened real quietly to make sure my wash was washing the way I wanted it to. It took a good 3 weeks. Every day I was there greeting customers and asking them what they thought on the way out. This was very important as to tweaking the equipment. After being open one month I went to the local gas stations and put up some posters on the pumps ($20 per poster). I put up no more than 10 ($200 investment). On the poster it read "Grand Opening Special $5" in huge letters. I put up a 3X10 banner in front of the location ($100) Grand Opening $5 Carwash Special. I only ran this for 2 weeks and I only discounted my bottom wash. I have 3 packages $8, $10, $12 so I gave my $8 package for $5.

At the end of the 2 week time I sold more of the $10 and $12 wash then I did the $5 special BUT it got the customers in. Plus I greeted every customer and explained the difference between the washes.

I have been very consistent business wise. I broke even my 1st month..my customers are very loyal and come back all of the time because I put out a very good product.

I advertise once a month in the local paper for a cost of $125 per month and thats it. I NEVER put out a coupon. Instead I donate gift cards to local charity events. I get more business off a $25 gift card than I could ever get from a mass mailing.

Every local VFW, Legion, School, and Church is having some type of dinner fund raiser for a local family or charity. I alway ask is there going to be a raffle? If there is I give a gift card? There is usually no less than 60 people that are going to hear about your wash plus they could get the gift card. I get more customers this way than I could ever ask for. Think smart about your advertising and be dollar smart. Word of mouth is the best advertising.....and its free...........

 

[Chiefs]

Most important to your future marketing is to being to develop a customer data base. For example, come up with a customer survey for people to fill out and offer them say a $3 discount of your top package for returning it. Of course, they are required to disclose at least their name and address if not their phone number and email address. We have nearly 3,500 in ours and we really just began it in earnest a couple of years ago. Most have come from surveys returned, frequent washer cards, Club Cards sold and our new mover mailings. It is expanding every week.

As for having a problem if you have to give away a free wash to get business? Well its pretty arrogant, whether you are a new wash or 47+ years oldlike us, to think if you juts build it they will come. So I give away $1.50 raw cost (chemicals and utilities) one time for the opportunity to make a great first impression and hopefully a permanent customer (along with his wife, mother, father, etc). People move in and out of your market area monthly. Do you really think that after having just moved into a new area and even perhaps taken a new job, that they have nothing better to do than flip through a coupon magazine or an envelope filled with 50 different coupons just to find a car wash.
A direct mail piece sticks it in their face with zero effort to decipher what your offer is for. A 6-16% response rate ain't bad either.

When you've developed an extensive customer data base you can then target them. Its always easier to motivate a previous/existing customer than it is a new one.

Lastly, do not forget to COMMUNICATE with your customers. We do a bi-annual newsletter every year and give it customers along with their litter bag and moist, disposable towel. God help me if I ever run out of either one of those perks (total cost about 15 cents for both). Encourage them to communicate with you too - especially if they feel something was missing or done wrong. Their input while sometimes uncomfortable can often bring problems to light and help you to improve service.

Bill