Editor's note: This is the last in a series of articles taken from a seminar conducted by Rochester, N.Y.-based marketing consultant and National Tire Dealers & Retreaders Association past president Joseph A. DePaolis at the recent NTDRA convention in Dallas. ``Target marketing,'' according to Joseph A. DePaolis, helps further determine who your customers are, their needs and concerns and what you must do in order to get more of their business.
Step one: Examine your current customer base using zip code analysis.
Analyzing a sampling of the zip codes found on sales tickets or a computer printout is a good way to find out where your customers are coming from, Mr. DePaolis said.
Be sure to select sales tickets from a typical week's activities-rather than one in which your business ran a promotion that might fail to provide a realistic picture of its customer base.
Using the marketing area map discussed earlier as a reference, write down the zip codes found within your marketing area in the left column of the Zip Code Analysis Chart (Exhibit A). Allow space to note zip codes from outside your normal marketing area but which still might be of value in identifying your company's customer base.
Determine the number and percentage of customers from each zip code number listed. Enter these findings in the second and third columns of the chart.
Identify the high- and low-volume zip code numbers as well as several that represent the greatest sales volume. Use a specific color marker to mark your map and enter these on Exhibit A.
Do the same for the lowest-volume zip code numbers.
Obtain population totals for these zip codes from the previously discussed demographic reports and enter them on Exhibit A.
Attempt to determine why your business is drawing heavily from some neighborhoods while attracting few customers from others.
Among the possible reasons for this, of course, might be the relative amount of direct mail advertising devoted to each specific neighborhood, competition from other outlets, each area's residential or non-residential composition or its distance from your outlet.
After analyzing such information, determine which neighborhoods or areas offer your company the greatest opportunities for increasing its sales.
Market opportunities are not always evident unless we look for them, Mr. DePaolis said. When, he asked dealers, was the last time either you or your employees:
1) shopped the competition to see what was working for them?
2) visited a potential business account to introduce yourself, ask how many employees are on their payroll and where they buy tires and get their vehicles serviced?
3) checked out an apartment complex or housing tract in an attempt to learn how many occupants there are your customers?
4) contacted non-tire retail establishments to suggest doing tie-in promotions with them to save advertising costs?
5) asked your teller at the bank, the waitress at your table or your pharmacist etc. not only to do business with your store but also recommend it to others?
``Even though you work in the area,'' he said, ``you should identify all these potential customers, take a very positive approach and solicit their business.''
Your major competitors don't do these things, Mr. DePaolis told dealers. But doing them, can help you keep neighborhood business for yourself.
Step two: Using the Marketing Area Opportunity Check List (Exhibit B) as a guide on what to look for, carefully drive through your marketarea in order to obtain the following information:
1) What are its major streets?
2) What businesses are there?
3) What are its main shopping areas?
4) What sort of vehicle traffic exists-including traffic associated with schools, factories, hospitals, office complexes, etc.?
Driving through your market area in this manner also provides an opportunity to ask owners and managers of other retail businesses where their retail traffic is coming from and for suggesting joint sales promotions.
Step three: After returning from your drive-through, enter your findings on Exhibit B. Then take the action suggested by your analysis.
``Do something,'' Mr. DePaolis advised dealers. ``Don't just let the competition take your hard-earned business away....''
Step one: Determine exactly what you want to accomplish with your marketing program.
Do you want to build store traffic? Liquidate inventory? Target a specific customer group?
Step two: Establish a system for tabulating results when you analyze sales tickets following the close of a promotion effort.
This will be essential in carrying out the next step in your micro-marketing program.
Step three: Critique your results. Determine what was successful and what was not and try to learn the reasons why. Then use this information to fine-tune your marketing program.
Just as you allocate resources to brick and mortar, you also must dedicate resources to bringing the motoring public into your outlets, Mr. DePaolis reminded dealers.
There are five ways to become rich, he added: The first is to be born rich. The second is to marry into money. The third is to win the lottery. The fourth is by being in show business. And the fifth-and only way for most of us-is to own a business.
``So when you start thinking how tough business is, or that you'd take the first offer to sell,'' remember 90 percent of the 3 million U.S. millionaires made it by owning their own business!''
Mr. DePaolis is president of Consultative Services, 341 Panorama Trail, Rochester, N.Y. 14625; (716) 385-5682.