I hear the refrain all too often: “We close most of the customers who come in, but we don’t get enough store traffic.” Getting footsteps to the door is one of the oldest and most complex management issues retailers have ever faced. Things haven’t changed much since pioneer retailer John Wanamaker allegedly said, “Half the money I spend on advertising is wasted; trouble is, I don’t know which half.”
But things have certainly changed.
Newspaper circulation has been in a steady decline since 1990. Slightly more than half of Americans now read a newspaper during the week and only about 62 percent read the Sunday paper. That doesn’t mean folks have stopped looking for news; it just means they are getting it from additional sources.
The Newspaper Association of America last summer reported that 55 million users per month visit online newspaper sites compared with 42.5 the previous year. The report also showed that online readers are spending six percent more time on those sites than before.
Similarly, while network ratings for news and entertainment have fallen, people haven’t stopped watching TV. They’ve moved to Fox News and CNN to see what’s going on. While veterans NBC, CBS and ABS are struggling to retain their viewers, Fox’ show American Idol took the top spot in the most recent Nielsen ratings.
When it comes to magazines, female boomers prefer Oprah’s O magazine, Real Simple and Newsweek while their partners opt for Sports Illustrated—not the Time and Life that our parents regularly read. None of those are favored by Gen X and Y, who read Wired, FastCompany and a host of Internet blogs.
What does all this mean to you? If the American readers and viewers have changed their habits, you’ll have to change your marketing strategies in order to reach them. It’s no longer productive or cost effective to drop a circular in a major metropolitan newspaper, to buy enough local network TV spots to reach your prospects or to run ROP frequently enough to create top of the mind awareness of your store. You have to define your niche and circle your wagons around your target customer.
First, profile your best customers, the ones you’d like to see come in your store over and over. Where do they live? How much do their homes cost? How old are they? Where do they work? Where do they play?
Do the same exercise for customers you don’t reach but would like to. Are they younger? Do they live in lofts downtown? Where do they go for entertainment?
You may find that you have multiple market segments. Maybe you sell your most profitable home theater systems to affluent empty nesters that have moved from the suburbs into townhouses closer to the city. But your biggest appliance sales may be to families in those same suburbs. And your lower-priced replacement video and appliances may be sold to families in less expensive neighborhoods where incomes are slightly lower.
How much difference is there from one neighborhood to the next? On melissadata.com, I discovered that homes in the zip code just east of mine recently sold for an average of $155,000, while homes in the zip code just west of mine sold for $315,000. Entirely different demographics mean totally different buyers, but both groups need the products you sell.
And even if you think your target customer is just the wealthy, there are multiple segments in that group. MRI has developed the Upper Deck report. Upper Deck demonstrates that not only are “the very rich different from you and me,” as Scott Fitzgerald observed, but they are different from one another. MRI sees five Upper Deck lifestyle patterns:
1. Well feathered nests are households with at least one high-income earner and children present.
2. No strings attached households have at least one high-income earner and no children.
3. Nanny’s in charge are households that have two or more income earners, none high-income, and children present.
4. Two career households have two or more income earners, none high-income, and no children present.
5. The good life household enjoys a high degree of affluence with no one employed.
Once you’ve determined who you are trying to sell to, you can narrow your marketing to ensure that each group gets the right message.
Consider using more direct mail. You might send households in a less affluent neighborhood a postcard offer including some low-priced special buys, as well as a few step-up products.
Mailings to the “well feathered” or “no strings attached” prospects might include lifestyle pictures of beautifully integrated home theater vignettes or fully operational luxury kitchens.
When you do opt to insert a circular in the newspaper, match the offer to the homes that will receive the piece. You can also tailor your cable TV and radio advertising so that the message on the local public radio station is different from the one you run on This Old House.
And don’t forget powerful electronic advertising on your website and via email blasts and newsletters. You can practically market each customer individually via email.
Finally, continually measure the effectiveness of your marketing. Ask every prospect what drove them into the store. Find out who is hearing your message and who is reading your direct mail. Eliminate the ones that aren’t pulling people in and put more money into the ones that are working.
Sure, things were easier in the days when all Americans looked the same, mostly spoke the same language and all watched Ed Sullivan and Lawrence Welk. But we’re a highly differentiated society now, segmented by age, income, address, ethnicity, values, and desires. But we’re all alike in that we want to be spoken to in our language – be it Chinese, Spanish or English and all of their various dialects – with a message that hits our own individual hot buttons.
If you’re up to the challenge, you’ll hit the target.
Elly Valas owns Valas Consulting Group. Her column, “Guerrilla Marketing,” appears each month in Dealerscope.
