Colonial Hardware Retools DM ProgramNot content with 20 percent of its customers providing 80 percent of sales, 74-year-old Colonial Hardware is upgrading its direct marketing program this year to bring in new customers.
Colonial Hardware, New York, sells specialized supplies for electricians and plumbers that big-box stores such as Home Depot "can't and don't want to sell," said Dennis Gronim, Colonial Hardware's senior vice president.
The company has used direct marketing since the 1980s, first with a basic tri-fold mailer and more recently with a 300-page catalog distributed each September. The big book always is supplemented with smaller brochures during the year, but there never was a specific strategy for timing or design.
A year ago, the company decided "to spend the money to professionalize what we're doing and have someone tell us what we're doing right and what we're doing wrong," Gronim said. This way Colonial Hardware could expand the direct mail and Internet side of its business and not be so reliant on "a group of old salesmen who think they run the company and their customers."
After consulting the Direct Marketing Association's Web site, Colonial Hardware hired Marketsmith Inc., Montclair, NJ, to energize the brand with a direct marketing program. Facing stiff competition, "Colonial said, 'We want to sell smarter and more efficiently and in a way that our customers need us to do it,'" Marketsmith president/CEO Monica C. Smith said.
One change involves mailing at least four times a year, with the mailings earlier in the year saying that the big book will be distributed in September and any mailings afterward referencing that it was published. Once Marketsmith updates Colonial's site, www.blackbookoftools.com, the mailings also will aim to drive online sales.
The first piece designed by Marketsmith mails this month: a 20-page catalog featuring Colonial's best-selling tools with a $20 coupon good toward a next purchase of at least $200. Previously, Colonial mailed an eight-page brochure on heavy paper stock that cost the same as the 20-page catalog, which uses a lighter stock. Also, the brochures showcased a general cross-section of Colonial's products.
"Of the 100 items in the brochure, customers would buy 60," Gronim said.
In contrast, the new catalog features the best-selling items such as a Ridgid 700 Portable Power Drive for $980, a Greenlee Plumber's Stud Punch for $324, a Klein Cable Cutter for $17 and a Bosch 4 1/2-inch Mini Grinder for $74.
Another change was to eliminate inconsistencies. For example, prices were presented differently from item to item. Colonial instituted a consistent presentation throughout all mailings, which is evident in the January catalog. Also, the Web site address and toll-free telephone number are in the same spot on every page.
"Colonial used to make the customer work to find this information," Smith said.
Finally, all mailings will strategically define the brand's point of difference whenever possible. This includes same-day shipping, which Colonial can do because of its large in-house inventory; an in-depth selection of what customers need on a daily basis to work; and guaranteed lowest prices. These brand attributes are communicated repeatedly throughout the January catalog. Marketsmith also analyzed Colonial's shipping practices and persuaded the company to expand its free-shipping offer, which is on orders exceeding $200.
"We always offered free shipping, but we're expanding the zones that we ship to," Gronim said, because Marketsmith showed that the additional cost would be minimal.
Marketsmith also will test different direct mail formats.