Smart Bombing

The 31 American Tire & Service Co. stores under Scott Hook’s oversight had participated in mass advertising programs before, but in late 1997 Hook wanted to focus his efforts on more-likely customers.

“In the past, I had done carpet bombing,” says Hook, American Tire’s district manager for the stores. “It was pretty effective, but there was a lot of waste.”

It wasn’t an easy task. Many of his stores, especially the underperforming rural outlets, were deep in the heart of do-it-yourself country in the San Diego, Riverside and San Bernardino, CA markets. Breaking through to them would be a challenge.

But Hook had a strategic advantage. Each of his stores maintained a customer database. This allowed Washington, DC-based Advo to create customer profiles on a target-area-by-target-area basis.

American Tire’s customer profiles were matched up with “geographically desirable” individuals in Advo’s database. Using a new co-op mailing targeting program, Advo Targeting Zones (ATZ), American Tire was able to target households that shared demographic and lifestyle characteristics with existing customers.

“Building blocks in the [target zones] are wholly contained within ZIP codes, so we can leverage the efficiencies of shared mail at a lower level of geography,” says Advo’s VP for strategic business Stephen Webster.

The ATZ program allows American Tire not only to target specific households but to vary its offer on a zone-by-zone basis. The offer sent to customers in a metropolitan location-$16.99 for an oil change- reflected the area’s tendency toward a higher-priced competitive environment. In more rural areas, the offer (same service, $11.99 for the October mailing and $14.99 for January’s peak-season mailing) was discounted to reflect the economic climate.

Using the ATZ structure, the mailing focused on 10,000 compatible households within a three-mile radius of each outlet. Those target areas that did not yield enough potential customers were expanded to a five-mile radius. While the results of the two mailings are still being tabulated, Hook reports an estimated lift of about 10%.

In future mailings, Hook plans to further modify the offer based on a store’s capacity. Targets living near American Tire retailers that have high levels of operating efficiency will likely be sent harder “we’re here” offers.