New homeowners are fertile marketing targets - marketing techniques of nurseries - Brief Article - Statistical Data Included

Home Channel News, July 16, 2001

These customers respond to mailers and other promotions, and the more eye-catching the ad pieces, the more effective

Dealers who send out direct-mail pieces to customers are thrilled if the response rate exceeds 2 percent. But when garden centers send direct promotions to new homeowners, the response rate can be mind-boggling. Wayne Moore, president of Moore New Home Owners, reports that anywhere from 10 percent to 30 percent of the homeowners who receive mailings that his company sends out on behalf of garden centers act on those direct ads. "This is probably the most important group that could be targeted," maintained Moore about new homeowners as potential customers for dealers of lawn and garden products.

More than 6.4 million new and existing homes are sold or resold annually. The new homeowner is unique because he or she is coming into a neighborhood with specific needs but probably without specific store loyalties. The dealer that can attract that customer into its store with the right mix of products and services has a strong shot at keeping that customer.

Armstrong Garden Centers in southern California entices new homeowners in the Los Angeles and San Diego markets with mailers that offer a 20 percent discount on their purchases. Armstrong's director of marketing Jeff Nance explained that the promotion usually more than pays for itself because the average purchase per new homeowner "is much higher than" that what Armstrong's typical customer spends per-store visit. "And we have a customer for life."

Nance concedes that every dealer is targeting new homeowners, who can be deluged by mailings as well as other comeons. "New homeowners are getting offers for everything from free ice cream cones, to free gifts, to free computer software," he said. Consequently, dealers say that their direct mail pieces need to be distinctive in either value or design. English Gardens in Dearborn Heights, Mich., offered new homeowners only a $5 discount that didn't produce a high-enough rate of return. The dealer has since stopped marketing specifically to new homeowners who "have a lot of other things on their minds," a company spokesperson stated.

Moore's company has specialized in this kind of promotion for 14 years, "and we've learned a lot of tricks along the way," such as making sure the customer's name is mentioned at least three times in the text. Moore said that his company also sends mailings using first class stamps to make them look mote personal. Both Moore and Nance noted that the mote attractive or eye-catching direct-mail pieces are, the more likely the customer will be to hold onto it. (Armstrong sends out what Nance refers to as "beautiful, oversized postcards," which features a garden scene on one side and a store offer on the other.)

Both Nance and Moore locate new homeowners through various list companies. Moore cautioned that it is important to get the names of new homeowners, and not "new movers. New-mover lists are culled from companies that get change-in-billing-address forms, and represent a much-wider -- as well as less-targeted -- group than new homeowners.

Moore has discovered, through trial and error, which are good lists to use in different regions of the country. He implements everything from lists provided by local county recorder offices to private list companies -- depending on the location.

Brenda Vaughn, ad manager at Michigan-based Bordine Nursery, buys lists from welcome-wagon organizations. "We give them a gift certificate to drop off, and then they sell us the addresses of the homes that they went to. Those people get on our mailing list." Vaughn said that this is one of her company's best programs, with a 5 percent response rare. The program costs the company about $2 per house.