Is it Really Simple Math?
Posted September 1, 2011 by adminHow to take advantage of the Holiday Season
It’s no secret the dealers surviving and / or thriving in today’s market are walking faster and taking bigger steps. And with four of the entire years major holidays on the horizon, (Halloween, Thanksgiving, Christmas and New Years) this could be THE period that makes or breaks your entire year.
With that in mind, what better time to pick up the pace and hitch your wagon to the forthcoming turkey induced consumer spending frenzy?
Oh… and one new BONUS holiday to consider, Cyber Monday. As a refresher, Cyber Monday is a marketing term for the Monday immediately following Black Friday. The term was originally created by the National Retail Federation and announced in 2005. Although this may seem like ‘manufactured commercialism’ who cares… we’ll take it any way we can get it right?
Although I’m still slow to embrace how, and if, the Dealer network is really going to build a profitable ecommerce department (key word profitable), there are many creative ways to leverage cyber Monday to drive traffic INTO the dealership using the internet as the MEDIA. For example, you could email your list savings vouchers and coupons only good for ‘in-store’ visits and add these incentives as web-banners on your site. That counts as ‘CYBER’ doesn’t it? Or, if you prefer online shopping cart sales that’s great too, just be sure you’re set up to fulfill and ship those orders in ample time.
But let me back up, I’m getting ahead of myself. According to the NRF, last year consumers injected $56.31 billion dollars into the economy during the Halloween holiday alone. As I write this, Fall has just arrived and the local grocery stores and banks are already getting into the spirit with pumpkins, hay bales, and Halloween themed displays. As soon as Halloween is over they’ll quickly move into merchandised themes compatible with Thanksgiving, Christmas, and New Years.
Why?
Getting their customers AND employees into the Holiday spirit positions these local businesses to go for the 70% of discretionary dollars spent by Americans during this 5 week window.
Here’s a simple math formula taught to me by the late John Wyckoff that I dig out for review every year around this time.
I call it simple math because the premise is simple. Here’s the math formula:
47W = 30% vs. 5W=70%.
The 47W represents the number of weeks per year and the 30% equals the total percentage of discretionary dollars spent at retail stores during those 47 weeks.
But stay with me, here’s where it gets good. The powerful portion of the formula shows that during the specific five week period of the year from Halloween to New Year’s consumers spend 70% of all their discretionary dollars.
Yeah I know, decorations cost money and it takes valuable time to put them up and take them down.
Yeah, I know ‘the money’s in the metal’ and due to seasonality and the weather this period can be less than ideal to sell units so it can be hard to justify expensive marketing campaigns.
My thoughts? Improvise, Adapt, and Overcome.
Remember the part about walking faster and taking bigger steps to survive this market? In addition to working harder in this market you must be working smarter too. And that means having a prepared in advance marketing and merchandising plan of attack to optimize this window. A good place to start is with your budget. Once you know what you can afford, you can then look closely at the specific media that will best compliment your objectives. But don’t be cheap. This time of year that’s penny wise and pound foolish. One to two percent of your total projected sales is a good place to start.
Remember, the purpose of your marketing is not just to go after new customers, but to increase the frequency of visits from your past and present customers, AND raise the average value of each customer who does spend money with you.
Prioritize your planning with the utilization of assets you’re already paying for (like your staff). The difference between averaging $50.00 per invoice and $150.00 per invoice can be an enthusiastic well trained team. Have multiple educational staff meetings covering gift card sales and other holiday related gift suggestions.
Your web-site should be appropriately updated with holiday specific gift offers, and your in-store merchandising should exude the holiday spirit. Next, take a hard look at your customer database. This is another hidden marketing asset often overlooked this time of year. Who are your top 100 retail customers by margin? How can you reach out to them with a very ‘personal’ offer to think of you for all of their shopping needs?
How many email addresses do you have? How can you segment your list to provide relevant gift suggestions via email? What about phone numbers? A voice broadcast is very affordable way to contact your best customers and invite them to an open house. A live call? Even better.
And don’t count out direct mail. According to a recent DM news study of 08’09 consumers age 18+ 40% reported trying a new business because of direct mail and a whopping 70% reported renewing a severed or inactive relationship with business because of Direct Mail.
Get into the holiday spirit and participate in the holiday buying frenzy. Or, you could just avoid it and forgo the opportunity to share in that 70% of the consumer’s discretionary dollar that will be spent somewhere else.
