Mobile Strategy Beats Direct Mail; Test Case Shows Breakthrough Results in Reaching Customers
First Choice Haircutters Increased Revenue, Cut Marketing Costs with retailcommon
Traditional marketing techniques are giving way to digital strategies. But it takes hard evidence to convince businesses to change from what seems to have worked in the past. First Choice Haircutters, with nearly 450 locations across North America, set out to test whether the retailcommon social shopping platform could produce better results than its traditional Direct Mail-Direct Response (DMDR) program with redemption rates as high as 10 percent. The company found higher revenue, reduced expenses, and increased coupon redemptions 55 percent when it turned to retailcommon.
Retailcommon delivers promotional messages to consumers on their smart devices using a mobile platform that integrates seamlessly to the retailer’s own website. Customers see the content in a Pinterest-like display. Retailers get instant data on how the marketing efforts are performing and can quickly optimize content to maximize results.
First Choice Haircutters decided to test retailcommon at certain markets with company-owned stores by offering a $3 haircut discount with a mobile coupon simultaneously with one of its twice-yearly DMDR coupon mail-drops. The test focused first on the London, Canada market in 2013, expanded to a second market in spring 2014, then to a wider region including much of Ontario in fall 2014 where 100 locations participated.
“We needed to see how the program would work,” said Athena Kalkanis, First Choice Haircutters Brand Director. “We mirrored the direct mail campaign so we could compare apples to apples. The retailcommon program did quite well.”
“The retailcommon platform has proven itself. With mobile coupon deployment, we saw a lift in sales and traffic versus the same period last year, as well as a reduced campaign cost,” said Matt Orlando, President of Tag Idea Revolution, the agency representing First Choice Haircutters.
Orlando said the First Choice mobile test promotions reached a total of 62 million. Coupon redemptions increased in the test markets from 4,200 in 2013 with the traditional direct mail approach compared to 6,500 in 2014 using the digital strategy, a 55 percent increase. Sales in the test areas increased by more than $200,000 year over year. Those results came along with a reduction of $5,500 in marketing expenses in the test markets. The evidence is compelling reinforcement about the wave of digital technology and helped alleviate some internal concerns that the mobile coupons may not be accepted.
“People found it was a lot easier for them. Everyone has their phone. They have the discounts on the phone when they walk in, as opposed to having to cut a coupon out and bring it in,” Kalkanis said. “The biggest thing is the cost saving. Dropping a direct mail piece involves costs for printing and distributing, which are enormous in Canada. Doing the mobile coupon saved a lot of money, that’s for sure.”
Kalkanis added that the platform permits rapid flexibility to focus on particular areas of need. For example, retailcommon messages can be tailored for specific markets that require attention.
“It’s very efficient. We can get results quickly to see how redemptions are going. And we like the opportunity to do specific promotions very rapidly. If you realize you aren’t doing well in a particular market, you can quickly put out a promotion for that market. With printed material it takes longer to coordinate,” Kalkanis said.