Direct marketing is the use of one or more media vehicles to solicit direct responses from customers and prospects. One such vehicle is direct mail.
Although the advantages of direct mail may not be fully understood by much of the ski industry, American Express, Disney, Time-Life and Hewlett-Packard, to name a few, have been using direct mail techniques successfully for years. Direct mail allows you to pinpoint specific groups of customers and prospects to whom you can tailor your advertising message, and this targeting makes the technique the least expensive of advertising available. Direct mail is also the most measurable type of direct-response advertising.
Seven characteristics of direct mail have been outlined by the Direct Mail Committee of the American Association of Advertising Agencies:
1) Selective—It allows you to target individual prospects.
2) Personal—It allows you to offer solutions that meet individual prospects’ needs.
3) Non-competitive—It has little competition with other advertising messages.
4) Flexible—You can easily change the package and style of your letter, brochure or newsletter.
5) Easy to change—The working of content of your sales message can be changed from one mailing to the next.
6) Uniquely promotional—It lets you test various promotion opportunities. Private “by invitation only” introductory offers and other special invitations, such as those to exclusive pre-season ski previews, can only be promoted by direct mail.
7) Economical to evaluate—You can always count the number of responses to a particular mailing campaign.
Direct mail is a specialized type of advertising message designed to deliver a message and solicit an immediate response. Unlike general advertising, direct mail asks for a conscious decision and a response. Even if the prospect throws away the literature, he nevertheless reads the message. Direct mail is a personal medium, but you still have to make the right offer to the right person at the right time.
Developing a Database
Inherent in the direct marketing process, especially in the use of direct mail, is the development of a database of both customers and prospects, along with supporting data, which becomes the basis of future promotions. The database is recognized by marketers throughout the world as the most essential element of marketing and business plans for the decades ahead.
To build a database, the ski marketer must first compile a “House List,” drawing on records of customers and former customers, inquiries, prospects and other responses to advertising. A ski area’s best customers are the ones it already has. It is much easier and less costly to resell a satisfied customer than it is to create a new one.
A database can serve as a marketing information system which can help in making marketing decisions and is based on facts, such as: 1) Who are my customers? 2) Where do they live? 3) What do they buy from me? 4) What do they listen to, read and watch? 5) How do I reach them effectively? 6) Where do I find more like them? 7) How do I keep them and get them to come back more frequently?
Basic skier information can be gleaned from hotel reservation files, group rooming lists, surveys, ski rental and ski school records and ski shop lists. In many instances, where lodging, rentals and apparel shops are separate from the main resort, it will be necessary to set up an interactive informational network. The marketer will have to enlist the cooperation of all parts of this network and, where a hotel or shop is not keeping adequate records, he will have to convince them of the importance of soliciting from their customers the type of information that the marketer needs. Often a hotel will only require the name of the party making the reservation. If there is another couple or two in the group, these names will be lost to the marketer unless the hotel retrieves the names of everyone in the party.
The extra work put in by central reservations, or by the hotels and shops, to gain the customers’ names and the extra information about those customers for the database, will benefit more than the main resort. For example, in the interactive network, a customer list exchange system can be put into operation, and when a cooperating ski shop supplies the main resort with its customer list, the resort can in turn give the shop its customer list for its market area.
Another method of building a database is the use of on-site promotions to collect names of day skiers. One example is a raffle where skiers fill in their names and addresses. The prize can be given away, may be anything from ski equipment to a ski vacation.
Snowshoe Campaign
I instituted a pre-season mailing campaign for Snowshoe Ski Resort, W.V., before the 1980-81 season to known skier-customers and identifiable skier domiciles to urge skiers to make their reservations now. Mailings were dropped in late August and early September. This campaign was continued for three successive years, through 1982-83 (See Ski Area Management, Jan.-Feb., 1984, issue). In addition to television and radio, I mailed out an eight page magazine-format brochure promoting the proposition “Don’t Daydream, Do It! Make your reservations now. Ski Wild Wonderful Season and save 35%!”
Each year I included in the direct mail piece a customer survey with self-mailer to gather as much skier profile information as possible, so that I could determine how best to get skiers to ski Snowshoe, ski there more frequently, stay longer and spend more money. Thereafter, I was better able to gear my advertising messages to their needs.
The pre-season direct mail program for the Wild Wonderful Ski Season produced an average of 32,171 skier days over the three-year period, as opposed to 15,101 skier days before the campaign was initiated. The 18,878 skier day total in the 1982-83 season was particularly significant as this was one of the worst ski weather years ever at Snowshoe. Snowshoe was down 43,000 skiers as late as January 20th that year and yet was able to finish the season with an increase in skier days and revenue. The combined total for pre- and post-season skiing was 44,264 for the year—a not-too-disappointing figure considering the weather conditions. Without the direct mail promotion for both pre- and post-season skiing, the 1982-83 ski year would have been a disaster. In sum, by using selective targeted direct mail along with other advertising media, Snowshoe was able to double its skier days, from 130,000 to approximately 260,000, in just four years.
| Year | Pieces Mailed | #Customer List | Outside List | Surveys Returned | Skier Days | Pre-Season Revenue |
|---|---|---|---|---|---|---|
| 80-81 | 35,000 | 18,000 | 17,000 | 3.2% | 33,140 | $1,000,000 |
| 81-82 | 75,000 | 47,000 | 28,000 | 4.7% | 44,497 | 1,000,000+ |
| 82-83 | 125,000 | 97,000 | 28,000 | 9.2% | 18,878* | 1,000,000++ |
Other List Uses
The ski operator must do all he can to exploit the segmentation of his customer list and database for internal use and for rental to others. To offset the cost of computerization of the House List, he can rent it several times a year to non-competitive, ski-related businesses.
The House List needs to be organized into market segments, such as Sectional Center Facilities (the first three digits of your zip code), zip codes, states, counties and major metro areas. Once the skier origins are determined and the corresponding skier numbers tallied, several responsible advertising decisions can be made to increase future sales.
I implemented a late ski season (March) television and radio promotion for the Canaan Valley Ski Area in West Virginia in 1984. Prior to buying the television and radio time, I monitored the area’s database (reservation records) from the lodge for the year to determine where customers were coming from over a year’s time. From that database the area purchased a $17,000 television and radio buy. In the last phase of the broadcast media program, I tracked from the reservation database the effectiveness of the television and radio promotion in the targeted areas.
This promotion, although not as selective as direct mail, was successful because of the effective utilization of the customer database to buy radio and television in the marketplace where the ski areas customers were coming from. The results proved that the message was going into the right markets for their particular customer.
| Year | March Skier Days | Revenue | T.V/Radio |
|---|---|---|---|
| 1983 | 3,901 | $104,000 | — |
| 1984 | 13,400 | 525,000 | $17,000 (5 markets) |
Prospects and inquiries are another important component of the House List and database. To capture the names of prospective skier-customers, I recommend a program of cooperative functions with ski shops. For example, when a shop is having a pre-season sale, the ski area should send a representative to register shop customers for a ski vacation at his facility. The same technique is most effective at ski shows. These names should then be added to the database. Names and addresses from inquiry coupons included in print advertisements and brochures should also be added to the database.
The ski industry does not place enough emphasis on causing non-skiers or entry level skiers to try the experience. This market segment, which can also significantly increase skier numbers and add to the database, is probably overlooked because of the difficulty inherent in identifying the potential skier. Most ski area operators are unaware that psycho-demographic techniques have advanced to the point in other industries whereby the marketer can take the skier profile and by subjecting it to life style factor analysis and zip cluster correlation, identify specific neighborhood clusters within communities in the market area where potential skiers are likely to reside. Then he can target his messages with direct mail and other direct marketing media into these households and, at the same time, measure the response.
Cooperative programs with ski shops in which non-skiers are invited to educational functions where they are “sold” on the experience of skiing and enticed to the ski area with a low cost introductory package, can also provide a source of new skier names. The names of participants in the “Skiing is Believing” program should be captured for the database.
Outside Lists
In addition to the House List segment of the database, the Outside List or list(s) obtained or purchased from outside the ski area constitutes the other portion of the database. There are two basic kinds of outside lists: compiled lists (common interests) and lists of customers and/or inquiries from other companies or sources. With a demographic profile of current skiers, a list broker can help determine which list should be purchased for a direct mail campaign.
One important use of outside compiled lists is to match them against the house list to get a better feel for the demographics of the outside list for segmentation purposes. With proper in-depth analysis and testing, the ski marketer can establish a market for his product by demographics such as income, education, number of children (pre-school and school age) etc.
Business and professional compilations are derived from printed sources: directories, rosters, registrations at trade shows, Dun & Bradstreet, etc. There is a Directory of Directories with over 5,000 lists of directories of various sorts.
The ski area operator needs the services of a list manager or a good computer house that understands direct mail to assist in compiling and maintaining the house list database. The list manager will insist on regular duplication elimination of the database to keep the list current and accurate, with persons recieving only one piece of mail. The database may be merged and purged with other outside lists that are to be used. The cost factor with duplications can be large when the number of names is large. For example, a 5 percent duplication on a 100,000 can cost $1,000.
Companies like R.L. Polk, Metromail and Donnelly have the capability of reaching almost every domicile in the United States with an overlay of Census tract data. Other companies have the capability of creating statistically homogeneous “ZIP-Market Clusters.” This “geo-demography,” a wholly new approach to market segmentation, allows all forms of zip-related marketing data to be linked, correlated, profiled and analyzed across 40 or more homogeneous neighborhood clusters, providing more behavioral information than traditional demographics. Through geo-demographic zip-clustering, given sales records and other consumer data, the marketer can now find out who its prime customers are, how many they are and where they may be found.
None of these sophisticated technologies can be useful to a ski area unless it has at least a house list database. Compiling the names and addresses of current skiers is step number one in direct marketing.
