Marketing Maintenance1 May, 2008 By: Jacqueline Renfrow Response
Direct response helps keep the hardware industry strong as homeowners look to dig in during a slowing real estate market.
Cordless soldering tools, dual-function drills, band-saw blades — innovative products in the hardware market are alive and well. While the state of the housing industry continues to fade, the unwavering business of hardware has given home centers and hardware stores hope for an industrious year.
In fact, while profits are not expected to rise well above 2007's numbers, experts still harbor hope that consumers are opting to undergo home renovation and remodeling instead, which means more do-it-yourself (DIY) projects and the need for more specialized tools. According to the North American Retail Hardware Association/Home Center Institutes' 2007 Annual Report, hardware and home improvement profits are no longer in the double-digit category so normal early in the decade. However, sales are expected to rise 4.5 percent annually from 2006 to 2011.
The True Value brand is using Steve Watson, host of HGTV's "Don't Sweat It," to create mass appeal for both male and female DIY customers.
The face of hardware retail is changing. The big-box chains like Sears and Lowe's are buying up mom-and-pop hardware stores. Therefore, the face of DR marketing is changing with it. Now, DR marketing has to drive the consumer to retail in order to make profit and survive. And while both DRTV and print DR is still a mainstay for the industry, marketers are turning to viral campaigns on the Web to get the message out nationally in order to impacts sales locally.
Reach Nationally, Support Locally
True Value is a well-known hardware retailer brand, with more than 4,000 stores around the country. Based in Chicago, the company believes in marketing on both a national and local level through brand-building advertising, DR, traffic-driving events and promotions. While, nationally, True Value invests heavily in cable advertising, consumer magazines, Internet and public relations — and plans to increase its investment in 2008 — it also supports local DR marketing by providing the templates for customer loyalty campaigns.
"It works both ways," says Carol Wentworth, vice president of marketing for True Value. "We try to provide as many turnkey solutions as we can, because it can generate cost efficiency for them and take less time out of their day, but it also helps us to build a more consistent brand."
True Value s successful holiday coupon campaign has generated double-digit response rates for the companies 4,000 stores nationwide. The coupons, found in magazines, on the Internet, and in the mail, will be available on national cable TV for 2008.
Two of True Value's most successful DR campaigns, both produced on a national level but executed locally, are its holiday coupons and customer loyalty program. The first is a holiday letter campaign that entails mailing out coupons — with no minimum purchase requirement — to customers that are redeemable at a consumer's local True Value store. "This generates double-digit response rates and always creates overspend and a positive ROI for participating stores," says Wentworth. These coupons can also be found in national magazines and on the Internet.
"On a local level, our most measurable and effective direct response marketing is conducted through our customer loyalty program," says Wentworth. Another successful DR campaign is the True Value Rewards program. It is free for customers to join and requires no card to carry.
For marketing purposes, the program allows True Value to get a consumer's home address, phone number, E-mail address and purchasing information. Once a consumer spends a certain amount, a $10 certificate is awarded. The program is generating better than a 65-percent response rate on the certificates.
Similarly, LENOX — a leading manufacturer of power tool accessories, torches, solders and band-saw blades — has found success in print DR campaigns that are produced nationally and redeemed locally. The East Longmeadow, Mass.-based company opened in 1915 with 10 employees and now has more than 600 people working in more than 70 countries.
LENOX kicked off 2007 with a DR mail buy-one-get-one-free campaign for snips and HVAC tools. Since the launch, the company has averaged 1,000 redemptions per month.
LENOX, a Newell Rubbermaid company, is a business-to-business integrated marketer that utilizes DR to drive sales leads, sample products and drive end-user promotional campaigns. A recent campaign involved the new line of snips and HVAC tools. A mailed insert offered a buy-one-get-one-free offer.
"The campaign kicked off in first-quarter 2007 and has averaged approximately 1,000 redemptions per month for the past year," says Susan Spaulding, director of marketing communications for LENOX.
The company spends most of its DR money in the print channel and in partnerships with distributors, where 100 percent of LENOX's products are sold. A new print campaign for 2008 will be offered in publications and at point-of-sale and is called the "Hot Performance, Cool Mobility" program. When consumers buy a Mobile Torch System — launched in Q3 2007 — they can send away for a free die-cast LENOX replica car, like the one the company sponsors for NASCAR driver Jeff Burton.