Direct-mail advertising can be an effective tool to reach customers, boost store traffic, and increase sales. Yet it can also be ineffective, time consuming, and costly if used incorrectly. JCK asked several direct-mail marketing experts and independent jewelers with direct-mail programs to offer insight into a successful direct-mail strategy.
MANAGE YOUR LIST
The biggest mistake most retailers make with direct mail is insufficient list management, says Deborah Scarpa, president of DJS Marketing Group in Miami. “Every year, there are people on your list who will change or drop off through attrition, making a portion of your list undeliverable,” she says. “With the cost of postage, you will waste a lot of money if you don’t keep your list up to date.”
A key decision for independent jewelers is whether to use an in-house staffer to keep your lists fresh or hire an outside source. “There are a lot of retailers who aren’t big enough to have someone on staff dedicated just to list maintenance,” Scarpa says. “In these instances, it would be cheaper for them to have someone outside do it.”
Retailers should also segment their lists to understand the customer base, Scarpa says. She advises jewelers to break down their lists into meaningful categories such as by gender or by purchasers who spend a certain amount per year. To get this information, offer an incentive such as a drawing or discount on a quarterly basis.
Scarpa suggests spending more on direct mail to current customers than on a prospecting piece aimed at new customers. Prospect pieces will draw a smaller response rate than a direct-mail piece to existing customers. Prospect lists can be obtained from many sources, including circulation lists from upscale regional magazines.
TRACK AND MEASURE
James Porte, president of Porte Marketing Group in Weston, Fla., advises jewelers to take a multifaceted approach, including:
• Appreciation mail. This can be a card thanking customers for a jewelry purchase, repair, or referral. “Most jewelers say their best advertising is from word-of-mouth referral business,” Porte says. “Yet most jewelers do not follow up and recognize the person who made the referral. If you don’t, your customers will stop sending their friends and colleagues.”
• Stimulative mail. This recognizes an upcoming birthday, anniversary, or other special event and gives customers some jewelry ideas to act on. It’s also used to stimulate inactive accounts, e.g., offering a discount or gift to someone who hasn’t been in the store for two years. Letting customers know you’re having a special event (store anniversary, expansion sale, etc.) is another example, as long as you don’t hold sales all the time. Finally, reminder mail can be used to notify a bridal customer six months after the purchase of her engagement ring that it’s time to have the piece cleaned and inspected.
• Image mail. This includes catalogs and cards with pictures of jewelry. It won’t immediately drive store traffic, but it does keep your store on the mind of the consumer. “But if you are going to use this kind of mail, it must be done on a regular basis, because [if you’re] out of sight, [you’re] out of mind,” Porte says.
• Store-information mail. This informs customers about new products, a new designer or brand, an upcoming trunk show or other event, or new store services.
• Prospect mail. This includes general mailings sorted by ZIP codes, ages, household incomes, professions, etc. It can also welcome new residents. Porte says these programs have low response rates (typically less than 1 percent) and are not effective on their own.
Tracking and measuring direct-mail response is key to improving performance, Porte says. Direct mail with an offer, incentive, or call to action—such as a catalog or other “image” piece—provides a measurement tool. “Every time a person comes into the store, the sales associate or jeweler must find out what brought them into the store,” he says. “The ability to track and measure your responses allows you to see what is working and what isn’t, and you can adjust your efforts accordingly to improve response rates and return on investment.”
A direct-mail piece needs a compelling presentation to persuade the recipient to look at it. For instance, handwriting on an envelope personalizes it, which Porte says is critical. “With today’s variable data printing, you can print 500, 50, 10, or even one postcard and make each one personalized with a different offer,” he says.
The ability to do small runs cost- effectively also allows a jeweler to test different direct-mail pieces to see what works best before committing to a full print run, Porte adds.
BEST MARKETING TOOL
Kimberly & Co. Jewelers of Port Saint Lucie, Fla., mails about 250 birthday and anniversary “reminder” postcards each month. The cards typically offer a 10 percent discount for the customer’s entire birthday or anniversary month. It’s effective because the retailer doesn’t usually hold sales.
Because Kimberly & Co. Jewelers is located near the stadium where baseball’s New York Mets hold spring training, the retailer does direct-mail promotions involving the team. In one, the jeweler buys all 6,000 stadium seats for a game; gives 2,000 to charity; and holds 4,000 for customers, who must visit the store to get the tickets. “This is one of our most effective direct-mail programs,” says store owner Dave Rieger.
Rieger says that with birthday and anniversary mailings, event mailings (Mets, Valentine’s Day party, gentlemen’s evening), thank-you cards, and a holiday gift guide, he “touches” each customer via direct mail at least six times per year. He constantly cleans and updates his mailing list of 5,000 names.
“Many of our direct-mail pieces have yielded double-digit response rates, and we’ve done some things that we’ve even gotten back 30 percent to 40 percent of them,” he says. “We’re really into mining our customers, and building and maintaining that database, because it keeps us so close to our customers. In fact, direct mail has been so successful for us, we find we are using it more and more and doing less with some of our other advertising that isn’t as effective, such as local newspaper and radio.”
VERSATILE AND VARIED
Skatell Jewelers, Spartanburg, S.C., mails out monthly birthday and anniversary reminders with a gift certificate attached. One recent card promoted a partnership with a local restaurant: Customers who spent a minimum of $300 on jewelry received a free dinner.
Store owner Beth Skatell says personalizing the cards greatly improves response rates. She also sends direct mail to publicize several store events, including a women’s night and men’s night. For the women’s night—which includes no selling—guests enjoy music, wine, and catered food and fill out a “wish” list that Skatell mails to their husbands and significant others.
“Most men don’t know what to get their wives on special occasions anyway, so it’s a no-brainer,” says Skatell. “We’ve done it for three years, and it has grown every year.”
Skatell also sends out mailers for Christmas (which generated at least $15,000 in sales last year), Valentine’s Day, and Mother’s Day. Right after Thanksgiving, the company sends a mailer touting a three-day Customer Appreciation event, where customers get 25 percent off anything in stock. “We get at least a 10 percent response rate on that particular piece,” Skatell said.
Skatell also sends thank-you postcards; image “awareness” cards to her top 100 customers every quarter; and an elegant mailer to people who have gotten engaged with one of her diamond rings, inviting them to return for a free set of engraved sterling silver goblets and a discount on wedding bands.
“Direct mail is a wonderful way to reach customers,” Skatell said. “We look at it as a way to help you keep customers for life.”