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Old 01-12-2008, 12:50 AM   #1
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Default I can get 4% returns on direct mail.. want to know how?

Another article from my blog/forum.. written with my industry but it should apply to painters as well.

How To Systematically Dominate a Market: Part 1

I see so many companies that offer excellent service and superior workmanship floundering at lead generation. The biggest issue is not applying what they already know to their marketing agenda. Let me explain:

Most of us can tackle a job in our chosen field from A-Z with relative ease. We know what comes off the truck, where to begin and where to end. We can predict accurately the results of our efforts. When it comes to advertising there is so much rhetoric and empty promise that many of us get stuck spending money on low performance, single run campaigns that generate nothing. We end up frustrated and bad mouthing that particular form of advertising. Where are we going wrong? We are not following the same type of systematic approach.

The Rule of Repetition
Everyone has heard about this and, if you watch TV for a few hours every week, you have witnessed it in action. Yet, we will stubbornly deny this rule exists. We'll run two postcard campaigns (or maybe just one) and when we get two calls from a thousand names.. postcards go out the window. Everyone buys on trust.. no matter what the purchase. Repetition creates this trust.

But Repetition is EXPENSIVE !!
Not if you do it right. The key is what I call "small target domination".

What is Small Target Domination and Where Do I Begin?
Compile Your Target List
1) The first thing I do is establish the geographic area I want to target. It may be one zip code, or it may be a few. Drive to that area. Is it rich with contractor activity? Is it a keep-up-with-the-Joneses neighborhood? Take notes on what you see. Write down street names. More on why you do that in a moment.
2) Return home and begin to compile a mailing list. That does not mean you mail to the entire zip code. The zip codes are your starting point. You are looking to get the list narrowed between 500-1500 prospects depending on your budget. You can use a service like infousa.com to start narrowing your criteria. Criteria I use..
a) Ownership of the home for five years plus. These people have recovered from the inital purchase and are ready to start spending money on upgrades or curb appeal.
b) Household income at least twice that of the state average.
c) The value of the home itself. Odds are, if you have gone to the right neighborhoods in step-1 you will have a general idea of the home pricing there. I disclude houses over $2,000,000 as the homeowners are hard to reach. The majority of my customer's properties range from $350,000 to $1,000,000. It also goes without saying that you want to narrow only to homeowners and disclude renters.
d) Carrier routes: The reason I write down street names is so that I can determine the carier routes. I may only want to target half of a zip code. You can use the 'zip plus four' system as well.
3) Once you have your list of residences research the area. What newspaper do these people read? I'm talking about small geographic distribution/local papers. What do these people like to do for liesure? What is the dominant religion for the area? What schools do they send their children to? What restaurants and eateries do they frequent?

Now What?
Get Your Name Out There
My goal is to begin branding. That is a bad word to many experts with respect to small companies. Perhaps it is in the semantics of the definition. Let's call it 'trust building". As I stated in this thread, trust building is achieved via repetition. The more they see your name, the more credible you become. These are the steps I recommend.

1) Introduce yourself. Send out a letter of introduction. The key is to get people to open it. There are a couple of methods I use.
a) I send a standard letter envelope and include a magnet or drink coaster. (more on the drink coaster in another thread). When people feel something inside an envelope, they open it. Make sure the envelope is addressed to the homeonwer, not "occupant" or "resident". I have spent money on custom envelopes with "Special Offer Inside" and it produced no greater return. Spend your money on what's inside. The letter itself should be informative and have a friendly, personalized tone. Your goal with this intro is not neccessarily to sell your service. Its a "Hi, how are you, we're here if you need us letter". You can include a seperate coupon (print it on glossy stock) call to action if you want but it drives up cost and again, I did not see added return when I did that. The return on this first mailer will be nil to .25 percent. (by the end of the campaign, you should expect 3-5% returns)
b) As an alternate, send out an introduction greeting card. This envelope size is the most opened. I'm not going to get into what you say on the card, bit it is a great method for direct mail. I utilize it now as the second mailing in my campaign.

2) Now is the time to set up your support advertising. Remember when we compiled the lifestyle information about our target area? You use that now to determine where you will run ads.
a) Get listed in the contractor section of their local paper. If your budget is higher, place an ad in the paper somewhere.
b) Advertise in their church bulletin. This one is huge. There is a psychological advantage that occurs when people see your ads here.
c) Go to their local eateries. If there is a bulletin board, put a flyer up there. Talk to the owner. Many shops sell advertising on their takeout menus. I have gotten into leaving drink coasters with local upscale pubs. I had a call last month from a young girl that took one of my coasters home and called me. She didn't need service but her mother just had construction done and her house was filthy from the dust. That job paid for my next 8000 coasters.
d) Golfing is big in my demographic. These people are perfect. Disposable income and they don't DIY on the weekends when they can be out on the course. I have gotten to be friends with the guy that runs the clubhouse at a private course near my house. I leave flyers there and this spring I am co-sponsoring an outing. You'd laugh if I told you how inexpensive this exposure is.
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Old 01-12-2008, 12:50 AM   #2
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Part 2

I left off discussing support advertising. This is the low cost advertising that will pay for itself quickly as well as lend credibility to your company via high exposure. Now for the one that pays off the best..

Press Releases

Your local papers and TV stations have a hard time finding things to report about day in and day out. You may think nothing you do is newsworthy. Actually, nothing could be further from the truth. Here is what you do.

Talk to the schools in the area you are targeting. Explain to them what you do and your willingness to donate a service to them. Fix their bleachers, pressure wash the snack bar, paint a chain link fence, whatever you choose. Some schools may want to check you out first to make sure you are legitimate. Call the papers and the TV stations and see if they would be willing to give you a blurb or short article. It won't take you more than one or two calls to get a yes.

When that thing is printed, make copies to carry with you for sales presentations. Put one on your website. If you get a TV broadcast, put that video on your website. The whole goal of his portion of your campaign is to say "I am your neighborhood guy" and continue with exposure and credibility.
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Old 01-12-2008, 12:53 AM   #3
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In parts one and two of this series, we discussed how to begin setting yourself up for high returns on a targeted marketing campaign.

Once you have compiled your list and setup your support advertising and exposure, it is time to start making money.

2-4 weeks after your initial introduction letter and press release begin selling your service. I use oversized postcards that are colorful and have high quality photos on the front. I thoroughly recommend you have someone like Keith at KBK Graphics design this for you. We are targeting high end homeowners here. They don't expect to see something you put together in Microsoft Word or some free graphic program unless you are sufficiently talented to make something look professional.

You should see a little return on this one. Make sure you have effective calls to action on your mailer. The return on this mailer is going to be dependant upon how much diligence you have put into your support advertising. The key at this stage is to capitalize on the jobs you do get.

• On every single job arrive in a logo'd truck.
• If you can, get a yard sign out front (name, logo, general service, phone number)
PressurePros [logo]
Deck Cleaning and Staining
610-662-4036
• Put door hangars on 30 surrounding houses. "We just did work at 19 Palmers Lane".

People now have seen any combination of: a letter, a business card at local Qwiki Mart, an ad in their pizza menu, an ad in their church bulletin, a postcard, an ad in the classifieds, heard about what you did at their son's school, and have seen your truck roaming the neighborhood. Now, on their front door, is a colorful, professionally designed hangar telling them their neighbors trust your company. Starting to get the idea that now maybe they will begin thinking about that nasty deck, drafty window, sunroom etc?

Every three weeks for three more mailings, target the same list. At that point, I find I have reached saturation to 1500 homes. About midway into the campaign, the jobs you get are getting begin funding your future marketing endeavors, so you expand into the next area and begin the same process.

More Crtical Points
1) Have a website. People nowadays expect it. Put the URL on all your print and make sure your website is optimized for local search. Use PPC campaigns until you rank.
2) Be in the Yellow pages. Choose a smaller distribution book. Your leads are hotter than the shotgun books that cover large areas. An in-column ad for under a hundred a month is plenty. My smaller ads outperformed the larger ones I experimented with. Even with all of your advertising out there, people may go do some yard work one Saturday morning and now notice they need your service. They probably didn't save your print ads. They may go to the web or the yellow pages. Be listed there.
3) Stay in contact with your customers. Repeat business is huge. About a third of my business now comes from repeat customers.
4) In line with number three.. ask for referrals. Offer rewards for those customers that refer you. Thank you letters are an excellent time to do this.
5) Ask every customer how they found you. This will help you pinpoint your efforts like a laser.

How Much Will This Cost Me?
Don't think of it in terms of intitial expense but rather in return on investment. I'l be entering my fifth year of residential work and my marketing budget should be under 2% of my gross in '08. This methodology becomes a self generating machine. In '09 it is feasible for me not to have spend any money on advertising and still grow to over a half million per season just on the residential end. My biggest problems now are setting up more crews and insuring I don't have to get into the field for anything, including estimates. Spend the time and the money now and things like droughts, injuries and slow markets will not cripple you.

Hope this series helps someone to become as successful as they dream of being.
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Old 01-12-2008, 03:56 AM   #4
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Quote:
Originally Posted by PressurePros View Post
Another article from my blog/forum.. written with my industry but it should apply to painters as well.

How To Systematically Dominate a Market: Part 1

I see so many companies that offer excellent service and superior workmanship floundering at lead generation. The biggest issue is not applying what they already know to their marketing agenda. Let me explain:

Most of us can tackle a job in our chosen field from A-Z with relative ease. We know what comes off the truck, where to begin and where to end. We can predict accurately the results of our efforts. When it comes to advertising there is so much rhetoric and empty promise that many of us get stuck spending money on low performance, single run campaigns that generate nothing. We end up frustrated and bad mouthing that particular form of advertising. Where are we going wrong? We are not following the same type of systematic approach.

The Rule of Repetition
Everyone has heard about this and, if you watch TV for a few hours every week, you have witnessed it in action. Yet, we will stubbornly deny this rule exists. We'll run two postcard campaigns (or maybe just one) and when we get two calls from a thousand names.. postcards go out the window. Everyone buys on trust.. no matter what the purchase. Repetition creates this trust.

But Repetition is EXPENSIVE !!
Not if you do it right. The key is what I call "small target domination".

What is Small Target Domination and Where Do I Begin?
Compile Your Target List
1) The first thing I do is establish the geographic area I want to target. It may be one zip code, or it may be a few. Drive to that area. Is it rich with contractor activity? Is it a keep-up-with-the-Joneses neighborhood? Take notes on what you see. Write down street names. More on why you do that in a moment.
2) Return home and begin to compile a mailing list. That does not mean you mail to the entire zip code. The zip codes are your starting point. You are looking to get the list narrowed between 500-1500 prospects depending on your budget. You can use a service like infousa.com to start narrowing your criteria. Criteria I use..
a) Ownership of the home for five years plus. These people have recovered from the inital purchase and are ready to start spending money on upgrades or curb appeal.
b) Household income at least twice that of the state average.
c) The value of the home itself. Odds are, if you have gone to the right neighborhoods in step-1 you will have a general idea of the home pricing there. I disclude houses over $2,000,000 as the homeowners are hard to reach. The majority of my customer's properties range from $350,000 to $1,000,000. It also goes without saying that you want to narrow only to homeowners and disclude renters.
d) Carrier routes: The reason I write down street names is so that I can determine the carier routes. I may only want to target half of a zip code. You can use the 'zip plus four' system as well.
3) Once you have your list of residences research the area. What newspaper do these people read? I'm talking about small geographic distribution/local papers. What do these people like to do for liesure? What is the dominant religion for the area? What schools do they send their children to? What restaurants and eateries do they frequent?

Now What?
Get Your Name Out There
My goal is to begin branding. That is a bad word to many experts with respect to small companies. Perhaps it is in the semantics of the definition. Let's call it 'trust building". As I stated in this thread, trust building is achieved via repetition. The more they see your name, the more credible you become. These are the steps I recommend.

1) Introduce yourself. Send out a letter of introduction. The key is to get people to open it. There are a couple of methods I use.
a) I send a standard letter envelope and include a magnet or drink coaster. (more on the drink coaster in another thread). When people feel something inside an envelope, they open it. Make sure the envelope is addressed to the homeonwer, not "occupant" or "resident". I have spent money on custom envelopes with "Special Offer Inside" and it produced no greater return. Spend your money on what's inside. The letter itself should be informative and have a friendly, personalized tone. Your goal with this intro is not neccessarily to sell your service. Its a "Hi, how are you, we're here if you need us letter". You can include a seperate coupon (print it on glossy stock) call to action if you want but it drives up cost and again, I did not see added return when I did that. The return on this first mailer will be nil to .25 percent. (by the end of the campaign, you should expect 3-5% returns)
b) As an alternate, send out an introduction greeting card. This envelope size is the most opened. I'm not going to get into what you say on the card, bit it is a great method for direct mail. I utilize it now as the second mailing in my campaign.

2) Now is the time to set up your support advertising. Remember when we compiled the lifestyle information about our target area? You use that now to determine where you will run ads.
a) Get listed in the contractor section of their local paper. If your budget is higher, place an ad in the paper somewhere.
b) Advertise in their church bulletin. This one is huge. There is a psychological advantage that occurs when people see your ads here.
c) Go to their local eateries. If there is a bulletin board, put a flyer up there. Talk to the owner. Many shops sell advertising on their takeout menus. I have gotten into leaving drink coasters with local upscale pubs. I had a call last month from a young girl that took one of my coasters home and called me. She didn't need service but her mother just had construction done and her house was filthy from the dust. That job paid for my next 8000 coasters.
d) Golfing is big in my demographic. These people are perfect. Disposable income and they don't DIY on the weekends when they can be out on the course. I have gotten to be friends with the guy that runs the clubhouse at a private course near my house. I leave flyers there and this spring I am co-sponsoring an outing. You'd laugh if I told you how inexpensive this exposure is.
Repetition as a marketing tool does not build trust. It's just a simple psychological trick. Used every day, all the time, again and again to program americas sheep to believe propoganda from a multitude of sources. Mostly politics and sales.
But it does work. All the pointers listed are a recipe for sucess. Thanks for posting it PP.
Be careful of what you accept. More sales psychology. If you hand something to someone, they automatically take it....like a business card.

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Old 01-12-2008, 08:12 AM   #5
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This is an excellent post for anyone interested in growing thier business.

This one that deserves a sticky!
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Old 01-12-2008, 10:33 AM   #6
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Ken is the man, I know from personal experience - he has opened my eyes to marketing and made me pursue these avenues. I have seen 'success' immediately from taking his advice - and I don't do 1/10th of what he suggests above. Another person once told me, {substitute your own graphical area} There are millions of people on the northshore - and lots of them are looking to spend their money - you just got to figure out who.
I work with one woman who constantly says - 'Oh, they won't pay more'. I followed some of Ken's advice for '07, and I got more money!
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Old 01-12-2008, 12:31 PM   #7
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Thanks, Dan. I'm not the man, a guru or an expert. I've just been around in business long enough and have had good mentors. I am very glad to hear you have had the opportunity to make more money implementing some of the techniques I use.

I know the above seems overwhelming. Thats more a result of my being long winded trying to get something into print. As Brian will attest to, everything in business is systematic. Take things apart to their core and assemble them into order and you will make more money than you thought possible. It takes time, patience and dedication. If one thinks they can eliminate any of those three, that person may be better off hunting the classifieds for a steady paying job.
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Old 01-12-2008, 12:37 PM   #8
 
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Yup!

It's real hard to find a post from the PressurePros that was not a well thought out presentation with valuable information.

Thanks Ken.
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Old 01-12-2008, 02:18 PM   #9
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I think one of my goals for this weekend it to look at ALL the posts from Pressure pros.
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Old 01-12-2008, 02:24 PM   #10
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To add to the Target Area steps:

use Google Map for the area:
identify streets
use whitepage.com to pull names and addresses
I use stamps.com for postage, this also allows me to use the address book in stamps that adds 4+ zip

You can add a few names at a time or if you are having a off day post a community.

With Stamps.com you can use post cards such as Avery cards tied with a publisher program you can design the card and message, then on back Stamps will add your return address with logo, postage, and client address.
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Old 01-12-2008, 04:00 PM   #11
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PressurePros
Thanks for that information. I posed the question in the earlier thread and from all those responses plus yours I have better understanding of what to do and think you guys might have steered me from heading in the wrong direction.
I am also amazed and grateful to be able to sit at home on my schedule type up a question about whatever the problem du jour is and get so many people willing to offer advice or share their own experiances I only wish this had been around 20 some years ago
Thanks again
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Old 01-12-2008, 04:34 PM   #12
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20 yrs. ago - guys were making crazy money without advertizing - things have changed. My mentor is now retiring, who knows nothing of advertizing - was grossing 130-140k in the late 80's off his own back and a low cost helper. Guys were doing that ten years later in the 90's and they still thought they were making great money - even though 10 years of inflation had gone by, and the money was the same, now I don't know any painter who is making 130k off their own backs - you have to change gears and become less a tradesman and more of a business man to make the money these days.
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Old 01-12-2008, 06:01 PM   #13
 
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That is great advice and great information. I'm a young painter/owner who has been in the business a while and I can do good work, but that is only a small part of being successful in the business world. Successful marketing is my goal for 2008 and this sends me in a good direction. These are great ideas and a great start for someone who is building a business. Thanks
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Old 01-12-2008, 11:44 PM   #14
 
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Hey, Ken! I'm new around here and have been really impressed with how much you guys are willing to share to help others succeed. I'll come back often and hope I can add at least a little something to help others as well. Thanks! (love the avatar by the way)
DennisD.
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Old 01-13-2008, 09:26 AM   #15
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I think one of my goals for this weekend it to look at ALL the posts from Pressure pros.
Deleted my reply, wrong thread to post.
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Old 01-13-2008, 01:06 PM   #16
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There are millions of people on the northshore - and lots of them are looking to spend their money - you just got to figure out who.
What state?
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Old 02-08-2008, 10:30 PM   #17
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My company has always done mostly new construction and commercial work. I advertise alot to try to offset this with some residential work. I have done every type of advertising you can think of....spent up to 20k a year on it....newspapers, yellow pages..never got the "work" I wanted...all a waste until....last spring I did my first post card mailer....let me tell you..the best thing I've ever done. Did the cards myself with Microsort Publisher with artwork from my sign guy.(look very professional) Researched the types of neigborhoods in my area and used a couple of real estate services to make my mailing list. (dont pay for one...too expensive)..also send one out every quarter to homes that have either sold, expired, relisted or under agreement in my target areas..( usually homes between 500k --25 mil).great response... my total investment last year was under $3000.00 inculding postage and I landed over $100,000 in business...and its still coming in with interior work...referals...ect. This was the best way to advertise because I can select my target homes to maximize my profitability. Plan do double it this year...I think the key is timing....get em out soon as the weather breaks and people are itching to get out and work on their homes...good luck
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Old 02-09-2008, 09:36 AM   #18
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Ken - this may seem like a dumb question - but when you say you can get 4% returns on direct mail - do you mean, people who will call you back? Or you will land 4% and do the work?
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Old 02-09-2008, 10:09 AM   #19
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I think he means if he sends out 1,000 flyers he will get 40 phone calls, from their you can probaly figure how much work that is by using your closing rate, and you average size job. Is this correct Ken????
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Old 02-09-2008, 12:24 PM   #20
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Quote:
Originally Posted by Dave Mac View Post
I think he means if he sends out 1,000 flyers he will get 40 phone calls, from their you can probaly figure how much work that is by using your closing rate, and you average size job. Is this correct Ken????
40 may be a little high.... but I find that I can close about 75% once I get the lead....
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