DOOR TO DOOR
BOB FIORI is riding high on other people’s moving vans. Actually, his clients benefit just after a household move occurs, when their advertisements appear wrapped up in the yellow pages telephone directory.
Fiori is the president of Directory Dividends, a company that set out, in 1991, to get regional telecommunications companies to include ride-along advertisements with their yellow pages.
Today, the Devon, PA, company has agreements with six of the seven regional telcos in the nation. Ads for local businesses get through the doors of about 14 million newly arrived residents-that’s only 2 million short of the total number of movers annually. A pact with the final telco-New England’s Nynex-is in the offing.
And that’s not all. Fiori has no competitors that worry him. With the client base about to exceed 300, the company is growing. Client spending ranges from “$10,000 to well over $100,000,” he says, and the renewal rate is about 85%.
Why does it work so well? First of all, yellow pages arrive at a new resident’s door swiftly-usually within three to 10 days after a move. That means local businesses can make their pitch that quickly, too.
Second, “a mover is going to use yellow pages often,” says Fiori. “It’s a delivery they are not going to throw in the trash. They are going to need it to call the plumber, to look up the hardware store. Therefore, the package delivered along with the yellow pages is seen as valuable to the reader. The welcome package of ads and the yellow pages work hand in hand,” Fiori adds.
Advertisers are national chains and local retailers. A package might include pieces from a local supermarket, pharmacy, hardware store, dry cleaner and local newspaper. “We generally like to limit the amount of businesses [included],” Fiori explains. “The object isn’t 30 advertisers paying very low rates. The object is fewer advertisers at a little higher rate, but also guaranteeing higher response. Typically, there would be six to eight advertisers in the package.” The welcome package costs advertisers 10 to 20 cents per delivery.
“When you move, even within the same county, your shopping patterns can drastically change,” says Fiori. “The pharmacy you were using before you moved may not be convenient after you move. Businesses want the mover to come into their retail store first, for fear they’ll never come into their store because they’ve created a shopping habit elsewhere.”
Response rates for the welcome package are high. That’s because the retailer generally gives something away to draw in the customer. “Response rates can be enormous; 20% is not an exaggeration,” Fiori maintains. “It’s such a competitive retail world in supermarkets. An offer that works really well would be $5 off on groceries over four or five weeks. By the end of the fourth or fifth week, [the new resident] knows the whole store.”
As new residents arrive, begin to unpack and nose around a neighborhood, local retailers burst into a race to win their loyalty. When their yellow pages arrive via the U.S. Postal Service, the welcome package is shrink-wrapped to the book. Directories that are hand-delivered enclose the ads in a polybag along with the book.
The key to unlocking a new mover’s door and luring him or her to purchase at a local store is how the advertisement is delivered, Directory Dividends’ clients contend.
It’s about credibility, says Jim Pilsner, director of advertising at national pharmacy chain Rite Aid Corp. in Camp Hill, PA, which has participated in the ride-along program for almost five years. “It has a high welcome rate. People welcome the Yellow Pages coming into their home,” Pilsner claims.
The package is the only program Rite Aid targets to new movers. It sends out 5 million pieces a year “anyplace we have major concentrations of stores.” Pilsner is pleased with the response rates, recorded by barcodes on the coupons, but he won’t specify a figure. “Response has been very positive,” he says. “It’s above industry standards.”
In addition to the credibility issue, Fiori points out, Directory Dividends has it over other shared mail packages because, in addition to his packages containing fewer ads, clients can customize their pieces. “We like to keep the advertising four-color and not [just lookalike] coupons.”
Rite Aid, for example, supplies a book containing 20 coupons offering dollars off on products and services ranging from photo processing to health and beauty products. Since the company is trying to draw traffic to nearly 4,000 stores, it doesn’t customize, but keeps the copy generic and includes a Web site address and toll-free telephone number so the prospect can find out which store is nearest to home.
It’s a Gamble Winning over new movers is not a sure thing, but it’s a gamble worth taking, says Pilsner.
“We think people are in a buying frame of mind when they move into a new residence,” he asserts. “They have to restock the medicine chest and buy household items. That’s why we feel [the program] is pretty effective.”
“Once someone has moved to a new location, we know they need pharmaceutical services. So we want to welcome them to the area right away, show them how many locations we have, give them an offer, and hopefully, they’ll come into the store immediately and start a relationship with the pharmacist,” Pilsner adds.
Directory Dividends doesn’t receive lists from the telcos. Instead, the arrangement is for packages to be delivered by the yellow pages publishers to every telephone customer who orders a telephone at a new address. The company also can arrange for a telephone customer list to be delivered from a telco to an advertiser who wants to follow up 30 days after delivery.
Customers with listed and unlisted telephone numbers alike get the welcome packages. But those who are unlisted are automatically excluded from lists passed on to advertisers.
Financial arrangements with the telcos vary, says Fiori. Sometimes it’s a shared revenue agreement, sometimes it’s a 70-30 split, with the telco collecting the larger share.
A downside of the program, as with most shared media, is its inability to target the customer demographically.
“I don’t know if there’s a program out there that targets the new mover specifically,” says Donna Krissek, media manager for Wickes Furniture Co. Inc., Wheeling, IL. Wickes drops about 1 million packages a year in the six markets the company serves across the United States.
Targeting Trials Directory Dividends is experimenting with targeting, but right now can only focus on deliveries to apartments or homeowners. The company can’t target to specific ZIP codes.
More important to Krissek is that “it’s a cost-efficient way to get my message to the new homeowner.”
That’s partly because Directory Dividends can accommodate Krissek’s specifications. Wickes’ two-sided piece is four-color and slips into a 6-inch-by 9-inch envelope that’s too big to be acceptable to other shared mail programs.
“We show furniture in the piece, and showing furniture seems to be more effective,” Krissek explains, adding that the piece also includes a letter and a coupon to clip.
Most important, though, is “the immediacy of getting into the home-the fact that it gets into the home within three days, as opposed to other programs that might take two months-which would give my competitors time to get in there [ahead of me],” says Krissek.
Indeed, timeliness is Fiori’s greatest asset-and his greatest challenge. When a directory isn’t delivered within three to 10 days-at most-a campaign could be ineffective. “We need to continually work on distribution,” Fiori admits. “It’s a very large coordination process.”
