Marketing Tips Part 2

March 20, 2003


By: Matt Michel

When Garry Upton joined Lennox Industries in the 1980s, he learned that Lennox collected warranty card information. The information resided in the service department where they saw the cards as a necessary obligation. Garry saw them as money. He was appalled to learn that the service department went on a cleaning operation and tossed fifteen years worth.

Big company mistake right? Wrong. I know a new air conditioning contractor that threw out files on 30 thousand installations, representing three generations of work. That's right, 30 THOUSAND. He said he threw them out because they were taking up space and represented a fire hazard.

This week I talked with a new construction plumbing company that routinely throws out records after three years. Why keep them? Their longest labor warranty is two years.

How could you use these records? Start mailing to everyone that has a seven year old water heater. Tell them the average life of a water heater is seven years and their water heater is exactly seven years. Explain how the tank can start leaking. Paint a picture of the mess.

Ask if they run out of hot water too soon. Explain how a quick recovery water heater reduces the likelihood they'll run out of hot water, how it's effectively the same as a larger tank.

Describe how sediment builds up in old water heaters, that is, in their home's hot water supply. Take pictures of sediment collected from when you flushed a water heater.

Then explain how painless and inexpensive it is to replace one. Work with a bank or other lending agency, such as The Money Store, to offer financing so that you can talk in terms of $20 to $30 per month.

Like any direct mail, the response rate will not be extraordinary. It doesn't need to be. A very small response rate can result in a tremendous return. And when you KNOW that everyone you're mailing to is a prime candidate for your offer, your response rate should be two to three times what it would be otherwise.

Don't do one mailing and leave it at that. Mail to them over and over. Break through the clutter. Used properly, old installation and warranty records are money in the bank.

That's great for new construction contractors and established service and replacement contractors, but what about new companies? Offer to buy the old records of a new construction company. Find one that sees service as a pain, not an opportunity. Tell them that direct mail houses sell lists starting at 10 cents a name. Tell them you'll double it. Heck, pay them a buck a record if you have to. Some may realize they've got something of value when you make an offer and refuse to sell. Others will think they've become P.T. Barnum and jump at your sucker's offer. After all, they were probably going to throw them out anyway.

Source: Comanche Marketing. Reprinted by permission.
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Copyright © 2002 Matt Michel

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