Talk about a big lawn care operation. This one business has the size to surely dwarf most of it’s competitors in the area. They are now servicing 8,000 lawn care customers over a wide area but have hit a wall. Provided below is a great inside look at how a large lawn care business markets itself. I think this will be an eye opening experience for you and help you re-evaluate your marketing goals if you are looking to grow.
The lawn care business owner wrote to us on the Gopher Lawn Care Business Forum and said “Let me first give you a little background on our business. We have been in business since 1991. Each Spring we usually send out a direct mail piece to all the single family dwelling households in the metro area (printing around 300,000 pieces). In the past each household received up to 3 mail pieces from us in the spring time. This past year we tried doing a little more targeted mailings. We narrowed some of the carrier routes to where we were targeting a specific income level and home value. Currently we are in the process of analyzing the information to see if the targeted mailing helped.
The reason I am bringing this up is to see what other companies do. This is my first year doing the marketing for this company. The founder has been working with me in the analyzing because this was her project in the past. After working with her on this for 2 days, I am finding she does not have any rhyme or reason to how she decides which zipcodes/carrier routes to mail or target. We have been looking at the history from the last 2 years to see how many customers we received from each carrier route, and what the average cost per customer is in that area. We are also looking at our saturation rate.
Zip code 12345/c012
In 2006 we mailed 2x to 456 homes.
We received 5 customers and have 60 in the area.
Cost to obtain each customer was $40.
Same zip code/carrier route
In 2007 we mailed 3x to 456 homes.
We received 2 customers.
Cost to obtain each customer was $157.
Same zip code/carrier route
In 2008 we did targeted mailings 3x to 225 homes.
We received 2 customers.
Cost to obtain customer $84.
From the example above - 2006 we did pretty good mailing to the whole route. Saturation was pretty good in the area. But in 2007 we increased the mailing to 3x and the cost per customer shot way up. Since the saturation in that area is good we decided to try the targeted mailings 3x. The cost per customer went down but still not as good as we would like to see. Our customer acquisition cost goal is around $60-70 per customer. Maybe if we had only mailed 2x the cost would be better?
We service a HUGE area. It is approximately a radius of 20-30 miles. We currently have over 8,000 customers that we provide such services as weed control & fertilization, plant health care, and pest control. Our market penetration in some areas is better than others. Overall our average is about 10-12 homes per mail carrier route with about 600 carrier routes. We have a fleet of 18 lawn technicians.
The amount that was mailed each year was around 300,000. Last year it actually dropped to closer to 200,000 because of the targeted mailings. Our response rate past 2 years have been around 1.3%. Last year our response dropped to .8%
We purchase a list of single family dwellings from our mail house. That list is then divided into zip code and down to the actual mail carrier route so we can see how many people are in each area. The more homes that we mail to by carrier route the bigger discount we receive on the postage.
I think several years ago they may have done 2 different campaigns through-out the year, but since then it has always only been the spring direct mail piece. Since I started with the company I have brought in several different advertising campaigns. I advertise on google & several other search engines & websites, craigslist, phone directories. I began putting out a monthly newsletter through email. There are many other forms of advertising, but I can’t think of them right now. I am trying to increase the number of new customers through-out the year. I don’t want to just focusing on them during the spring season. I am trying to focus on referrals since that is one of our largest sources other than the direct mailing.
The last couple of years each piece was similar, with small changes. This year I will be designing a different piece because to me there was too much information and it was too busy. We send it out 2-3 times to the same househould within 6-8 weeks during the spring time.
As far as I can tell they have not tried experiementing to see which pulls the better response. Next year I have planned for 3 different campaigns. The first one is the spring mailing that they do every year. The next one will be late spring early summer to just the targeted mailings for our pest control side. And then the final mailing will be in the fall to the targeted mailings again to gain customers for the following year. I plan on having a different piece each time to see measure the response and see which type is best.
We have come to the conclusion that the targeted mailing did good in some areas, but had no effect in others.
Now my question is, what kind of formula do you have to figure out what area you should mail to and how often?”
A lawn care marketing expert shared his views on their marketing performance. He wrote “I’ll try to touch everything, but with all the different nuances and aspects to consider, this one could make for a lengthy discussion. Regardless, here goes….
In terms of the size of the mailings, 300K sounds like a lot, but it also sounds like you’ve got the budget to make it work. The key is to make sure you’re targeting VERY SPECIFICALLY. You’ve already mentioned that you started targeting your lists, but make sure you’re only mailing to those prospects that meet your exact criteria. Age, income, home value, # of kids, interests, etc. I don’t know if you’re doing this, but NEVER just buy a list of home owners within certain zip codes. Always take it to the next level and specify the individual criteria for each prospect.
As far as customer acquisition costs, $40 is FANTASTIC. Do you know the average lifetime value of your customers? I bet it’s WAY more than $40, probably somewhere in the $1,000’s. The $60-$80 range is a good target, but I’d be willing to bet you could spend close to $100/customer and still come out way ahead of the game.
With respect to the mailings you’re doing, unless you’re sending them at the same time of year, with the same offer, you’re not really testing. To accurately test, you can only test one thing at a time. So if you’re sending one piece, with a different headline, offer, deadline, call to action, testimonial, etc. in the spring, and then turning around sending a completely different piece in the summer, it’s not a valid test. You’ll never be able to pinpoint what’s working and what isn’t.
You’ve got to test your spring offers against your spring offers. Your summer offer against your summer offers, etc. What I’d do, is break up your list into at least 2 groups and mail slightly different offers to each group. Maybe a different headline or offer, but everything else the same. Gauge the response, and make some changes for next time. If you really wanted some good data, split your list into 4 different groups so you have more opportunities to test. But the key to remember is that you can only change 1 thing each time to get an accurate test.
In terms of response rates, I’d look at your offers. Are you making a strong enough offer? Is it low risk enough? Is it something that motivates them to pick up the phone EVEN IF they’re not ready to buy today?
I’m going to catch a ton of flack for this, but marketing has changed. You see, at any given time only 3% of your TARGET MARKET is ready to buy from you today. As a result, to create marketing that’s truly effective you’ve got to appeal to not just the 3% that’s ready to buy today, but also the 97% that is just starting to think about buying what you offer.
What this means is that brand building, presenting offers like ‘Free Estimates’, or ‘10% Off’, are no longer powerful enough to motivate your prospects to respond because #1 everybody does it so you sound just like everybody else, and #2 I may not be at that stage of the buying process yet.
Next, when it comes to clover leafing the neighbors. This is a process where you hand out door hangers to surrounding customers after they are serviced, send a postcard instead of the door hanger. Your list provider should be able to provide you a list of home owners immediately next door to your clients, and just time the mailings to coincide with the service visits. Same idea as the door hanger and the money you spend on postage will be time saved by not having to manually hang the door hangers.
Finally, focusing on developing referrals is a GREAT strategy. Use everything at your disposal to develop a good relationship with your clients and they’ll reward you with referrals. Email is a great way and definitely something I’d recommend, but it’s extremely easy to delete. Consider sending a hard copy, paper and ink newsletter on a monthly basis. Yes, it’ll cost you some money, but $.80/mo for an account paying you at least $100/mo (I’d hope you’re getting at least that), is a SMALL price to pay to strengthen the relationship and build a referral base. Believe me, a newsletter sent every month via snail mail, and NOT included with the invoice, will go a VERY long way to helping you build your business.
Okay, I’m sure there’s more I could say, but I’ve probably lost everyone by now with my ramblings. Again, this is a great post, a very interesting topic, and a discussion MANY lawn care business owners could learn a great deal from.”