Who Can Do It? In-store marketing programs can be tough for a home improvement company to pull off. How big do you need to be? Well-known industry consultant Rick Grosso suggests in-store marketing is for companies with a minimum volume of $2.5 million, although smaller operations working in one or two stores can be successful if the program is well-managed and the company owner is ambitious.
What does it take to make an SFI relationship work? Grosso cites four essentials:
SFI leads are among the most expensive. Some retailers will charge a per-month, per-store leasing fee. Some charge on a per-lead basis.
But in a typical SFI relationship, retail chains demand anywhere from 10% to 13% of gross sales. Add to that the cost of demonstrators, a display (if permitted), and follow-up calling, and your marketing cost can jump to 20% or more of the sale. One contractor who withdrew from Sam’s Club because of what he cites as “politics and red tape” estimates his lead costs for in-store generated jobs, including taxes and insurance, at 22% of volume.
Management In Tense Given a proper markup (Grosso suggests a minimum of 2.5 times labor and materials) and trained salespeople, success comes down to how well the actual in-store operation is run. Think of it this way: The level of managerial attention is equal to or greater than that for telemarketing or canvassing, but your personnel are spread out over multiple locations.
Not surprisingly, then, most companies using SFI as a significant lead source — say 10% or more of leads — designate a manager to oversee it. The manager recruits, trains, and supervises demonstrators. He or she also maintains daily, weekly, and monthly contact with retail store and district managers and files regular corresponding reports (see “Structures, Systems, Scripts,”).
Typically, companies send one demonstrator per store. Demonstrators can operate in several ways. Some approach shoppers in store aisles. Some man a booth or kiosk. Some companies attract interest by signing consumers up for a window or sunroom sweepstakes, as would be typical in show or event marketing. Those individuals — all of whom have given permission to be contacted by phone — go into the warm call database.
Other companies seek sales appointments directly and these, naturally, are confirmed at a far higher rate.
Expect to hire demonstrators — just like with telemarketers and canvassers — on a continuing basis. Even with first-rate training, demonstrators tend to burn out after a year or so.
Demonstrators who work alone must be monitored. Typically, they’re required to call in at the start of a shift, and then periodically stay in touch with a supervisor by cell phone. Lead quotas, goals, and regular weekly team meetings are tools to help ensure a steady lead supply from your in-store operation.
Schulz says that his company’s experience in in-store marketing shows that if “you pay them at too low a rate, you won’t attract quality people, and if you pay them too high a rate, they’ll just walk around and not talk to anybody.” He says his company has found success by paying demonstrators at an hourly rate well above minimum wage, with incentives for each demo and a much larger bonus when the demo becomes a sale.
