As a savvy operator I’m sure you thought about this but I’m surprised you didn’t do a test market with the initial mailing but done it a few weeks ago to see what the uptake was waited before mailing any more out. I remember doing a big mailing a few years ago on the same basis as you did. We got killed after the first lot of mail went out and then had to sit and wait for the next lot which I’d already posted and which we knew would be worse than the first lot.
You’ve got a pretty aggressive deal there and if its kicks off it may well kick off BIG time.
I’m a little surprised that your doing something so aggressive before Christmas is this a quieter time than usual for you? As you know I do aggressive stuff through the year but I never touch December with anything aggressive as this is (fingers crossed) one of our busiest months of the year.
My aggressive stuff is lined up to hit 1st week in January and is spread out for distribution over the 1st 6 weeks of 2010 and last until end March to cover a quiet’ish time.
So far the response is a bit less that I expected. I had 400 hit the mailboxes Monday, 600 on tuesday and 300 today. Monday yielded 15 of the certificates, Tuesday 42 of them and just over 30 so far today. I would expect to get over 50 today before close. All of the ones I have mailed thus far have been to apartments so it’s possible that many of these are still sitting in the mailboxes as many students don’t check their mail every day. Starting tommorow I’m going to step up my efforts getting these out. I want to get the next 3000 of them out in less than a week.
A couple observaitions so far regarding the orders redeeming these:
Ticket average before the discount is much larger than normal.
The percentage of carryout orders is much greater than normal, 35% so far as opposed to 18% normally
Both of these trends make this promo much less painful than I expected thus far.
I don’t have the specific numbers with me but thus far we have received over a 40% redemption on the $10 gift cards. They expire January 31st so I would expect 10-20% still to be redeemed. Some of the students may not have seen theirs prior to leaving for Christmas break so I expect a bit of a rush from them this coming week as they return for the second semester. December wound up being my highest December in sales ever. I’ll post the specific redemption numbers when I get to work but over we mailed 4050 and had 135 returned in the mail. We have received well over 1600 redemptions on the 3915 that were received by our customers. I have received 2 thank you cards in the mail, a few of the cards were redeemed with notes attached and countless thank yous over the telephone. This was a home run promotion in my book as I feel the good will it has built will really impact my long term sales.
What kind of average ticket did they generate?..Years back I worked at a streakhouse that sold a $5.00 gift certificate along with a logo-ed steak knife and gift box for $5.00…When these were redeemed, the average check was over $25.00…Not the same promotion as yours, however, I would be interested in how it worked out for you…
I just mailed out 2k menus with coupons in this morning, the next two weeks are our slowest of the year. It was a little terrifying watching people pull my menus from their mailboxes and walking to the “junk mail” recycle desk :shock: I was in line to buy stamps, and actually didn’t realize what I was about to witness. I’d say about 11 people grabbed their mail, and… NO ONE threw it away! I was both weird-ed out and elated at the same time. :? So… when I got my stamps I just had to take the long way around to the door to inspect the rest of the cans. Inevitably I saw one in a can, but just one. Upon leaving the Post office I had a kind of feeling like I just saw my Mom naked or something, I never want to feel like that again :roll: Anyway, we have already gotten about 2 online orders and 3 walk-ins from people we never knew before and now will be life long Hannah Banana fans. I will update after the weekend. Good thread!
If I understand correctly , you gave them a $10 gift cert with no minimum order?
and you have 1600 redemptions x 10 = $16,000 worth of free food
From looking at your site, you already have low prices. Was this worth it? how was the final outcome compared if you didn’t do it. I’m guessing about $4800 food cost plus the mailer cost. Did the increase of ticket make up for the promotional costs?
Did you have people who just gave the coupon, got a large pie and left?
1600 redemptions x 10 = $16,000 worth of free food
The math isn’t quite right on this one. The $16,000 is unpaid retail price, not cost. At 30% food cost this number is $4,800. There is no way those 1600 redemptions didn’t spend more money than the $10 offer. Even if no customer spent more money, $4,800 for 1600 customers is a BARGAIN. Lifetime revenue for 1600 customers will far exceed the $4,800 acquisition cost.
It is not hard at all to conclude that this campaign was a winner! Congratulations!
BP has a point. From what I know, Paul has a handle on the business and knows his market. However, your presumed cost of the marketing is flawed(imo). First, Paul places a value on 1) customer in his store; 2) customer calling him; 3) customer referring him. I would assign the cost (lets make this simple) as $16,000 MINUS profit% (your annual profit percentage). If Paul’s net profit is 20% then the cost would $16,000 - ($16,000 x 0.20) + cost of production = $12,800.00+. Now suppose Paul places a value of $2.00(how many repeat customers do you usually get… if 2 of every 10 new customers repeat, it’d be $2.00) on each responding customer in the marketing venture. 1600 * $2.00 = $3200.00 (Paul’s perceived value) so subtract the $3200 from 12,800 and you have $9,600.00 in costs. The big question to me would be during this period what was Paul’s increase in profit over normal? If it were zero, then I’d view that as a positive, because of the future return potential of those customers. If its an increase then its a grand slam (he actually made money on the venture). If its a loss, then it depends on how big the loss was…
But, as Paul has already said,
This was a home run promotion in my book as I feel the good will it has built will really impact my long term sales.
It isn’t 1600 acquired customers as Paul stated they were mailed to existing customers.
Assuming that they spent nothing more (which of course I’m sure most did) lets also not forget:
a) the extra labour required to make these (I’m sure Paul got extra labour in to deal with the extra business)
b) the delivery costs (there is a cost to deliver a free item!)
c) and I really can’t believe you of all people Jeff didn’t factor in… the cost of the marketing material and its distribution.
If your going to see if a campaign is financially successful you have to factor these costs in.
Only Paul will be able to tell us if it was financially successful and I’m not certain that that was his main objective in this exercise.
I’m now up to 2070 redemptions. While this was a costly promotion, in the short term its a break even promotion leading to significant increases in sales for December and so far this month. But I did this promotion with the long term in mind. My objective here was to increase customer loyalty and create good will. The comments I have received have shown me that I far exceeded my objective and I am confident this has built long lasting momentum which will be one factor in making 2010 my best year ever.