Industry marketing experts verify what blue-chip home improvement firms and remodelers have known for years: Direct mail works.
Reprinted with permission from Qualified Remodeler
AUTHOR Patrick O’Toole | May 2021
Last summer, after the dust settled from the initial impact of the COVID-19 lockdowns, Larry Chavez Sr., owner of Dreamstyle Remodeling in Albuquerque, New Mexico, walked through the steps taken by he and his marketing leader, Dawn Dewey, to supply leads to the company’s sales team in six states.
Dreamstyle, No. 14 on the 2020 TOP 500 list, billed $103 million in revenue on 8,000-plus jobs in 2019. The company serves New Mexico, Southern California, Arizona, West Texas, Colorado and Idaho, offering full-scale remodels near home and windows and shower conversions in all six states.
To that point, home shows and events had been a big part of their lead-generation strategy. But with those shows shut down, the duo made a very good choice. They resumed a robust marketing program full throttle, investing heavily in TV and direct mail.
“Every day during that period, I came to the office focused on supporting our sales team with leads that they will need to sell jobs tomorrow,” Dewey says.
Lead flow began returning to previous levels by early April. Then leads flowed at levels well exceeding prior benchmarks in the weeks that followed. By May and June 2020, the company posted its best months in company history.
Dreamstyle has been a savvy marketer for decades, relying on a mix of tactics, including direct mail, for a very long time. Dewey, who came to Dreamstyle with prior experience in the consumer-packaged goods industry, also understood the importance of good direct mail.
In an era when digital marketing is taking all the oxygen out of many marketing discussions, it is beginning to dawn on many home improvement pros that they are likely over-reliant on digital ads to drive leads. Many are said to be rediscovering the positive impact and cost-effective nature of a carefully planned direct-mail campaign. Many did not need to rediscover it; they’ve been wisely using it all along.
When averaging the marketing priorities reported by all the companies on the QR TOP 500, the average annual budget percentage allocated toward direct mail was 3.6 percent. That may not sound like much, but it’s a big number. Hugely successful companies like Renewal by Andersen, among many others, use direct mail consistently and for many purposes—neighborhood letters, outreach to past customers, and prospecting.
Examples and Details
To illustrate the different types of direct-mail pieces that are currently working for savvy home improvement companies around the country, marketing agency, TheBestPostcards.com, supplied Qualified Remodeler with several examples. They take many forms: letters, bi-folds and the most common, an oversized postcard.
This article shows seven different types of mailers, each carefully crafted to a specific marketing tactic. The bottom line is direct mail is a sophisticated medium that requires carefully crafted offers with strategic use of images and graphics, says Andrew Ettinger, owner of TheBestPostcards.com, who often finds that home improvement company owners typically underutilize the information that comes from their existing client base.
“We will ask company owners to send a list of their active customers from the last two years,” says Ettinger, explaining the process of creating target customer profiles. “We then take those customers, and we would plot them out on a heat map of their service areas. We show where their customers are coming from. Then we append the data with outside demographics to help them better understand who their client is—their ethnicity, their income level, their home values. This is for two purposes: First, it helps us find lookalike clients that meet target criteria. Second, we want them to implement a policy of reaching out to existing clients every month.”
Home improvement professionals who regularly report their marketing information to Qualified Remodeler and who use direct marketing consistently confirm that this kind of data-driven approach is the homework that is required to make a campaign successful.
Types of Mailers
There are many different types of direct-mail pieces that work. Ettinger’s company defines them by their physical configurations.
A prospecting bi-fold “plants the seeds for return on investment today while branding the company for the future business.” A bi-fold has four brandable panels and are typically used to establish a brand in a specific geo-zone.
Current-client mailers are typically larger-sized postcards used to help businesses stay in touch on a monthly basis.
“Regular, rhythmic communication helps protect clients from competitors,” Ettinger explains. “These reinforce your name and the services you offer. The content is usually seasonal to-do items and keeps a company top-of-mind with people who have already bought from them.”
A hyper-target mailer is utilized to communicate special offers and promotions to prospects who have been identified as uniquely qualified. They have the right income, the right length of home ownership of five-plus years, the right home value, and the right credit score.
Thank you card campaigns are directed at past clients for whom work has been completed. After many years in business, many firms have accumulated very large lists consisting of 10,000-plus names. These are valuable. These give past clients a reason to return or to send referrals. Custom branded and personalized, they offer gift cards or other incentives.
Radius marketing is a very well understood concept in the home improvement industry. Typically it is executed door-to-door by company employees notifying neighbors that a company is working in the neighborhood. The same marketing pieces that are left behind by employees can also be mailed. These are radius mailers. These are targeted to 150 homes around each installation. They are personalized to each homeowner and are accompanied by an offer.
One of the knocks against direct mail is how difficult it can be to get a clear understanding of a campaign’s impact on a company’s bottom line. But there are certainly ways to test effectiveness through matching back existing customers and prospects with lists that have been used for mailers over a period of time.
“We remove every 10th home from the list and use it as a hold-out test,” says Ettinger, offering an example of a test for a gym-membership client. “People who received mail had an 80 percent net lift in memberships than those who did not. This is important because management of the national chain did not believe in direct mail because people did not actually present their card. We proved it did, however, drive them to the website, where more than half members go to sign up.”