“Is it possible to double your business with this inexpensive small business advertising idea?”

This one’s for nearly any small retail or service business. Use a simple direct mail advertising idea to go to after your customers’ neighbors. This advertising technique takes little money – only some time and (ugh!) work . . . but it’s worth it!

How to get started

  • Pull up your list of your best customers’ names and addresses. If you don’t yet have this list, start collecting names now. You’ll have at least a partial one ready to use within a few months.

  • Next, build a prospect list of neighbors of those customers. Use your local Polk Directory (or comparable “criss-cross” directory in your city) to find the names and addresses. If you don’t have one, check with your local library.

    Use this directory to look up names and addresses of prospects that live on the same block or across the street from your customers. If you have only a few names, start there. If you have 150 customers, you should be able to assemble 500 neighbors easily.

NOTE: Keep your “neighbor” list separate from your customer mailing list. We never include prospects only on our customer list until they have actually purchased something.

When they do buy, run to your computer and quick put their names on your real customer list. You can immediately mail them again for your next major event.

What to put in your mailing

Use your computer to design a sales letter and a gift certificate to these prospects. With a program like Word, you can merge in the names of prospects into each letter and print envelopes as well.

Example sales letter

  • “Dear Mr. Blank,

    Your neighbors, Mr. & Mrs. Doe, are customers of our company and we’re grateful.

    The other day, it occurred to me you might like the (product or service) we offer, just like Mr. & Mrs. Doe use.

    If you’d like to sample our (product/service), I’ve enclosed a gift certificate. You can use it any time before (date).

    I’m offering a special invitation to you. Please come get acquainted. There’s no obligation.”

Example gift certificate

Design a gift certificate. See your printer. To make it easy, he should have a catalogue from which you can choose sample gift certificates.

Make your certificate a little larger and better looking than coupons. Tell your printer, “I want a pretty gift certificate no larger than a third or half sheet of paper”. Have him print it on high quality parchment-like paper to indicate it’s valuable.

Design a message something like this . . .

  • Gift Certificate big, bold and centered.

    “Please accept this certificate in the amount of $00.00, which you may apply on the purchase of any item (or service) at (Name of your business).

    OR . . . Please accept this certificate for a ($00.00 name of item or service) at (name of your business).

    It’s our gift to you. Use this certificate any time before (date).”

Include your logo and company name or have the printer spell out the name on the bottom of the certificate. Include your address and hours of operation.

What to expect

As an advertising idea, this type of letter is a form of testimonial in which you enlist the names of current customers to validate it. Look for a 10% to 30% response if your offer entices customers enough.

  1. Totally free certificates often make the best enticement . . . on the level as offering a free cup of coffee to a visitor in your home. Do you have some item or service that costs you very little and most prospects want? Tell people the retail price (which should at least double your cost), and offer it at no charge.

    Or try this excellent offer . . . an amount of money that your prospect may apply on the purchase of anything.

    Is your average ticket quite small such as a meal purchase? That means regular customers patronize you often, so consider offering two or three certificates for small amounts. You’ll invoke the psychological principle of familiarity. Once they’ve sampled your wares two or three times, they may acquire a taste and habit for your place.

    Concerned this advertising technique will cost too much? Sit down and calculate the value of each of your customers through a year. What’s your average ticket? How many times per year does your average customer shop with you? Multiply the two to get your answer. $200? $500? $1,000? More?

    The Commerce Department says an average customer stays with a business for five years. So, multiply your customers’ yearly value times five years.

    When you have your answer, ask yourself, “Would I give the cost of this item or service to get more such customers? If your answer is yes . . . well, get on with it.

  2. Otherwise, instead of gift certificates, can you offer a premium? A premium comprises something “extra”. I.e., “When you purchase this $60 item (at regular price), we also want to give you a $15 (product or service) as a thank you for trying us.”

    Calculate your average ticket and set up a premium. At retail, it may equal up to 25% of your average ticket.

    However, that same premium will probably cost you in cash outlay no more than one-half its retail price.

    When you offer a $15 premium, which costs you less than $7.50, you actually discount only 12.5% ($7.50 divided by $60). By now, you’ve probably realized people often fail to respond to a discount unless it starts at 20% or more . . . which usually wipes out your profit.

  3. Notice the difference from the norm in what you’re offering. No discounts because they cheapen your product in customers’ eyes. Many people regard a discount as simply a come-on.

    However, gifts or premiums mark you as open-handed and offering something extra. Even though you may consider them discounts, customers perceive them as additional benefits . . . not discounts.

    Look for some item or service most customers want. Research indicates when you find the right premium, it actually pulls better than a discount. Yet, it costs you much less and your customer also gets a good deal.

How about the cost of your
flyer or invitation?

Avoid expensive four-color pieces, etc. Keep it simple. Except in multi-thousand dollar priced products and services, expensive printing seldom adds to your sales return. It’s the message that gets’em. Make it look nice, of course, but avoid over-size, colorful and expensive pieces. We like an advertising idea that never gives all your money to the advertising people.

Print enough pieces to try this promotion at small cost. Your letterhead, gift certificate, envelopes and postage make up the balance of your cost.

For every ten neighbors you mail, you usually reap no less than one new customer . . . and may get as many as three new customers for each ten.

Your total cost for a 500-piece mailing should run no more than about $275 for everything, including postage, if you do it yourself.

Your all-important
follow-up

You know the drill. Welcome every customer with hospitality and a big smile. Treat them like kings and queens. Show them around.

Sometimes customers are shy about taking a gift. Make sure they understand you truly appreciate them and you “want to give them your gift”. Now’s your great opportunity. Don’t blow it. As they leave, thank them and invite them back.

Your reward?

If you have more time than money, use this advertising idea. An advertising technique like this has been known to double business.

Of course, if you double business, you may run out of time to do more mailings. Tsk . . . tsk. Problems. Always problems.

But that’s easily solvable. Hire some nice student or retiree to prepare the next mailing for you. Just think. By then you’ll have more money than time!

If you like this article as a small business advertising idea, you’ll like the monthly Maverick Strategy Newsletter. It’s free. Just sign up at the top of this page. We never share your name so you’ll never get SPAMed because of us.

I wish you well.

Rod Rademacher
Maverick Strategy
785-783-7756 or
E-mail us here

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