Petrucci started the newsletter two years ago specifically to cross-market to existing customers, most of whom had previously bought a roofing job from the company. “The newsletter allows us to go back and mine our old customer base and tell them that we now do bathrooms and kitchens, and that we won a design award,” Petrucci says.
Generally, an issue includes company news, consumer advice, and a spotlight report on one Bloomfield Construction project — a screened area converted to a sunroom, for example — that describes the job, the planning, the design elements, and the materials and accessories choices.
Usually Petrucci gets a couple of calls after the newsletter hits from customers interested in a similar job. “They’ll call [that winter] and say they were just wondering what that job sold for, and ask me to come out in the spring. I tell them I want to come out now so that I can get it figured out, get them prices and a schedule, so we can start when they want,” he says.
Petrucci develops the content in-house, with help from two salesmen. He e-mails some 3,500 customers, sends regular mail to 1,300 more, and posts the newsletter on the company Web site, where consumers can subscribe to receive it. All versions use the same materials, and Petrucci outsources all editing and production so it looks professional and is time- and cost-effective.
He’ll spend around $9,500 to mail the newsletter four times a year — about 5,000 pieces each time — plus e-mail, he says. That’s a small fraction of the value of business that the newsletter helps bring in. Last year, at least 28%, and perhaps as much as 40%, of Petrucci’s jobs were from previous customers. (People aren’t always clear if the newsletter prompted the contact, he says.) That’s two to three times more previous-customer leads than the company had prior to marketing with the newsletter.
LOW-COST OUT REACH You can get some results marketing to previous customers without an elaborate or dedicated system. If your list is small enough, you can manage it with something as simple as a Microsoft Excel spreadsheet. But why would you want to? Sufficient computer power and “customer-relationship management” software to build and manage your customer database will put your marketing into a new league, marketing expert Waldeck says.
“The cost of this technology has come down so much — relative to capabilities that are so vast — that there is no reason why even the smallest of operations shouldn’t be taking advantage of what any larger organization has,” Waldeck says. “You’re putting yourself at a competitive disadvantage if you don’t.” And there are many such software programs readily available to home improvement contractors, he adds.
But a database demands data. Previous-customer marketing depends on the customer data you’ve collected; the more the better, contractors advise.
“Keep good records and keep them current,” says Larry Summer, co-owner of K&H Home Solutions, in Arvada, Colo. Summer, like many contractors, now records every detail of the sale: the product, any problems that occurred, the customer’s satisfaction, etc.; and all inbound and outbound customer contact by whatever means — personal, by phone, e-mail, and direct mail — in the company database.
And you can go beyond that. Petrucci, for example, has similar data plus 12 years of job photos in his database. You can also capture data to classify customers on their likely future profitability, suggests Eric Schmitt, executive vice president of Allant, in Naperville, Ill. “The odds are very good that a minority of your customers drives the financial performance of your company,” he says. Did the customer pay promptly, or choose high-end options? Keep that information and you can direct more marketing attention to the segment that is most likely to provide more future profits, he explains.