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Marketing Retention Numbers

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Hi all,

I had a very good March after some heavy local advertising and postcard mailings. I have a question reference follow-up expectations. My April numbers have been off 30% off my March numbers, which were up almost 50%. I am not a math major, but it appears I kept about 17% of what I gained from the ad blitz. My question is what should I optimally expect from a ad campaign? Is 20% acceptable or am I doing well below average. For reference purposes, I serve primarily a 1700 home area with 4 major competitors hurting me. I currently capture about 20% of that business. and with business from outlying areas can at least pay the bills with that percentage. Obviously, my goal is to move well beyond that. With input and ideas from j_rOkk others here, I’ve made considerable changes to improve my business. However, this month, April has almost put a nail in my coffin. I plan on continuing my marketing plan, but have seen little carry-over effect after the initial mailing (had hoped for a cumulative effect month-to-month). I don’t think I am being fatalistic here as I have done this two years now and am heartbroken I am back at square one. Thanks for listening and will sincerely appreciate any insight any of you long-termers have.

Bob
 
April has been a very bad month for me in general. It would be had to discern if you had a poor retention or not.
 
Same here. Awesome March, Slooowww April. That being said, the last week has been great, just made up for the first 2 weeks of the month. Hopefully it stays up!
 
Pizza Bob2 writes:
I had a very good March after some heavy local advertising and postcard mailings. I have a question reference follow-up expectations. My April numbers have been off 30% off my March numbers, which were up almost 50%. I am not a math major, but it appears I kept about 17% of what I gained from the ad blitz. My question is what should I optimally expect from a ad campaign? Is 20% acceptable or am I doing well below average.
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Pizza Bob,

My question to you would be, “How many new customers did you gain during your advertising blitz in March?” Whatever that number is, you can count on about a 30%-40% retention rate within the next 4-6 weeks. Generally speaking (and this is extremely vague as I don’t know any of your specifics), if your R.O.I. on your advertising is 4:1 or higher, you can deem your campaign successful.

Naturally, your sales will slip a little in April (time change has an adverse effect on consumer buying patterns, tax season has a percentage of people pinching pennies, weather starts to get a little warmer so more people are out and about rather than staying huddled next to the fireplace and ordering pizza because they don’t want to get out, NCAA baskeball tourney has ended).

For those of you who’ve found yourselves entertaining a better April than March I commend you because you’re doing a fantastic job. Not too many that I know of in this business are enjoying a fantastic month of April (including myself - over half my base is gone now. grrrrr) unless:

A) They were super slow in March and have really hammered down on advertising.
B) Sales have continuously grown each and every month due to solid marketing plans.
C) You’re a new store or you’re under a new direction with your existing store.
D) You’re very well established in a large metropolitan area and your sales climb automatically anyway.

It seems as though you’ve got a good plan with this blitz because of the obvious sales increases last month. My only advice to you would be to continue the trend you’ve started and make sure you keep your options open to new avenues of saturation. In my opinion, the biggest factor affecting marketing success is the lack of consistency. Stay consistent with your campaign and you’ll benefit from it in the end. Hope this helps. -J_r0kk
 
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Multiple units here and April was definitely down from March. (Southern Calif). Most restaurant owners I know were down for April.
 
Although I feel I have a good marketing plan in place, with continual tweaking etc., I think I goofed by hitting some outlying areas instead of focusing on my core. Although I can buy April being weak in general, my business softness this month indicates to me I needed to focus my mailing on the core folks (have been trying direct mail every two months–but leaning towards monthly). As I looked the numbers over, it appears I’m hitting about 30% retention. And I am figuring my ROE is about 5–so I am happy there, but the ad budget is stretched to 8%, which is probably much higher than the norm. BTW, j_rOkk, I’m gonna use your “create your own sensation” I saw from one of your postcards you e-mailed. And, you are right, the Mon-Weds specials not only confused people, but we would invariably get calls starting Thurs for that special LOL. Now, I’m using one special highlighting FREE delievery and a one-top pizzza–simpler and I think/hope very effective for the rest of the month and May.

Cheers,

Bob
 
We had a similiar discussion to this a couple of years ago in the Think Tank. It was more based upon the 80/20 rule but I’ll rehit what we discussed in the past.

Alot of operators find that 80% of their sales come from 20% of their customers. You can give or take a few percentage based upon marketing efforts and non-marketing efforts but as a general rule. 80% of your business comes from 20% of your customers.

So let’s say you have 3000 customers in your database. You will find that 20% of those customers order pretty regularly and generate 80% of your busines. So you would have 600 customers ordering on a regular basis. If you want 1200 ordering, pick your database up to 6000 addresses and this could likely be the case.

Then through direct mail, hopefully you can have those 1200 customers ordering 2-3 times per month, and you’ll have pretty decent sales. Especially with a higher ticket average.

Out of curiosity, everyone reading this post. Please post your percentage numbers of actual ordering customers vs non-ordering customers in your database. Define Ordering customers as those who have ordered within 30 days. Non-Ordering Customers… those who have not ordered in over 30 days.
 
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