Retailer Hopes to Convert DM List to E-Mail
The merchant spends about $80,000 per year on direct mail costs, and sends mail pieces to its customers about four times per year.
Mike Culwell, president of the 80-year-old family business, hopes that eliminating direct mail from his company's marketing mix can cut costs.
"Even if I could convert 80 percent of my file, it's so cost-effective that I would drop direct mail altogether," said Culwell.
Aside from the benefit of reduced costs, Culwell said that the immediacy of e-mail is the other main factor in his decision to focus on building his e-mail database.
For example, the company sent a direct mail piece in September advertising a two-month in-store promotion on suits. Culwell then sent an e-mail reminder in October to customers about four days before the end of the promotion.
"This is where this has proven to really work well," he said. "We did almost as much in those last four days as we had done in the prior month. We did about $20,000 worth of business that weekend based strictly on that [e-mail] reminder."
While Culwell & Son has been collecting customers' e-mail addresses for the past two years in its stores and at its 3-year-old Web site, www.culwell.com, since March, the company began a more concerted effort in June.
The ratio of names collected online to those collected in-store is equally split, said Culwell.
"Part of the problem with the ones we collect in-store [is that they're] handwritten, and then rekeyed at a later time, so some of them end up being bad addresses," he said.
Since then, the retailer's e-mail database has increased from 600 e-mail addresses to 4,000.
"It's slowed down a little bit. We started off with about 1,000 [per month], but now it's stabilized at about 600 or 700 a month," he said.
E-mail marketing services company e2 Communications, Plano, TX, manages Culwell's e-mail marketing efforts. John Palms, vice president of marketing at e2, said that some of e2's staff were on Culwell's direct mail file.
"Some of us had shopped at his store, and started to pitch him on the idea of e-mail marketing," Palms said. "So many of these small businesses think that [e-mail marketing is] for the Fortune 500 and [it's] not. [Culwell's] overall investment [in e-mail marketing] will probably be in the $7,000 to $10,000 range."
E2 developed Culwell & Son's eClub newsletter, e-mail notices of in-store promotions and events, which are sent approximately twice a month to customers. When customers sign up for the newsletter, they receive a $25 gift certificate for in-store purchases of at least $100. The average sale from redemption of the gift certificates is $265, Culwell said.
Culwell & Son, with a staff of 100, also operates a dry cleaning service and a barber shop in its Dallas location. Palms said e2 plans to tap into those resources for the next phase of Culwell's e-mail marketing strategy.
For example, the retailer may send e-mails to customers offering $2 off their next haircut "to drive some additional traffic to the store. These people have to walk by the merchandise to get to the barber shop," Palms said.
Palms also said the proximity of Culwell's store to Southern Methodist University may provide some additional marketing opportunities to the retailer.
"[Culwell] can hold some seminars for MBAs getting out of SMU," he said, "talking to them about how to 'dress for success' and getting their e-mail addresses early."