Target Marketing

Obviously, homeowners with lawns that live within your service area are potential prospects for your lawn or landscape service.   But there are homeowners who might be interested, homeowners who are probably interested, and homeowners who are most likely to buy.  All of them make up your Marketing Universe.  The challenge is to determine which prospects in your marketing universe to target with your direct mail, telemarketing, television, door hanging, or other marketing efforts and how aggressively to do that.

 

Imagine that your marketing universe is a pyramid.  At the top of this pyramid are your very best prospects – your customers.  This is the part of your prospect file that gives you the best return on your marketing dollar.  Most of them return as customers year after year.  You sell extra services to them when they need them.  They generate referrals for you.  Some of them pay you in advance for a year’s service.  How much does all of this cost you – pennies compared to what you’ll spend generating new sales from the rest of your marketing universe.

 

 

 

Your customers are your company’s biggest asset.  Treasure them and don’t be so aggressive in marketing to them that you become annoying and lose them.

So how do you target the non-customers that are most likely to buy your services and therefore not waste time, effort, and money trying to solicit sales from those less likely to buy?

 

 

 

The Answer: Target  Marketing

 

You need to rank all of the remaining prospects in your universe and target them based on that ranking.  One of the most predictive variables in who is most likely to buy your service involves the degree of relationship they already have with your company - the stronger that relationship, the more likely they are to buy your service.  Here is a simplified version of how your non-customer prospects might rank.

 

  • Cancels - They’ve already been on your service and unless they are extremely dissatisfied, you have a great chance of getting them back.  If your former customer has moved, chances are good that the new homeowners will be interested in your service and you already have history in taking care of the property.

 

  • Rejects – They’ve already contacted you about an estimate; you just didn’t sell them.  Try again.  They know who you are and they are interested in buying your services.

 

  • Neighbors – Not your neighbors, the neighbors of your customers.  They’ve seen your truck; they’ve seen your work; just give them a reason to buy.

 

  • Other Prospects – This is where it gets a little trickier because you have no prior relationship.  In fact, unless you have invested some significant money in a mass media campaign (TV, radio, billboards, etc.) chances are that many if not most of them have never heard of you.

 

So how do you identify who to target from the “no-prior-relationship” group.  You should start by profiling the customers you have.  Where you have been successful before is where you are most likely to be successful again.  This is true for both geographic and demographic variables.  You may have already noticed that you are fairly successful at generating new sales in the neighborhoods where you already have quite a few customers.  This is also true in different demographic groups.  If you can’t afford to get a detailed demographic profile of your customer list, or already have, chances are they look something like this:

 

  • They live in Single Family Dwelling Units (SFDUs) with a home value between $200,000 and $750,000.

 

  • They have a combined income of greater than $60,000 a year.

 

  • They are between the ages of 35 and 70.

 

  • They live in the suburbs.

 

  • They are married (or at least have been married), most with kids.

 

  • They have and use multiple credit cards, some with substantial credit limits.

 

  • They have discretionary income.

 

This is a sample.  Over the years I have looked at customer profiles in over a hundred different markets for lots of different companies and no two have been exactly the same.  And even if your customer profile was fairly close to this, not all of your customers would match each category, but I would be surprised if most of them didn’t share the majority of the above characteristics.

 

Income and home value are the most common variables used in purchasing lists for lawn care services, but on their own they are far from infallible.  Read more about LISTS.

 

 

 

Example

 

Here's an example of 4 households that all have a home value between $300,000 and $499,000 and show a household income between $75,000 and $99,000.

 

  • Household A: single, white collar employee, age 26, 2 regular credit cards with limited credit limit, car market value of $11,000.

 

  • Household B: retired couple, ages 72 and 75, mortgage almost paid, income from bonds and pension fund, low spending volume, little credit card activity, and one car with market value of $14,000.

 

  • Household C: married couple, ages 45 & 48, both white collar employees, high spending volume, home equity of $100,000, gold and platinum cards, two children ages 10 & 12, Porsche & Lexus SUV in the garage.

 

  • Household D: divorced, mom kept the house, age 39, mortgage and 2nd mortgage total $270,000, credit cards almost maxed out, two children ages 16 & 17, car market value of $7,500, more than half of income comes from previous spouse.

 

If you were making a list selection based only on home value and income, all 4 households appear to be good and equal prospects.  Obviously they are not.  When targeting your marketing programs, the best solution is to create a regression model that uses all of the predictive variables identified in your customer profile and the weight of each variable’s relative predictability to rank non-relationship prospects.  However, predictive computer models can be expensive to develop and are only as good as the accuracy of the data they are using. Not all demographic data is reliable. When we aren’t using a computer model, here are the demographic variables we use that have proven to be most predictive and most successful in generating direct mail response for lawn and landscape services:

 

  • Home Value – it mirrors income as a predictive variable and is available for most addresses.  And, when the source is county deed records, it is fairly accurate.

 

  • Age – Another variable that is usually accurate and generally available

 

  • Credit Card Usage – Not as available but worthwhile as a suppression tool (in other words don’t mail) for addresses that show up with credit card issues.

 

You can also use these variables against each of the relationship files (cancels, rejects, neighbors) to fine tune your selections to those groups.

 

Again, to be successful you will need to test and retest all of this.  This is just where you can start.  Once you execute a mailing campaign with these guidelines, analyze the sales you generated against all of the above variables and compare the revenues generated to the marketing cost to see what worked and what didn’t work; which list segments were profitable and which were not.  Note - it’s not just about getting new sales – it’s about getting new profitable sales.  Not all customers are created equal.

Once you are confident that you have identified your best prospects, you will want to test mailing multiple times to those prospects.  How far down the list you go for multiple mailings and how many times you mail each list segment will depend on what your profitability analysis shows.