Marketing Maintenance1 May, 2008 By: Jacqueline Renfrow Response
Direct response helps keep the hardware industry strong as homeowners look to dig in during a slowing real estate market.
Web Targeting New Homeowners
While a new generation of homeowners is always entering the market, the challenge for businesses today is meeting the needs of the digital-age savvy, first-time buyers. "Because this generation is digital, they will expect to gain skills, tips, product information and advice online," says Wentworth.
She expects that digital DR, whether it is delivered via cell phones or the Internet, will play an important role in the purchasing process. Customers may walk into brick stores to feel and compare products, but what they learn online will greatly influence selections.
True Value launched into the digital world of viral marketing with a 2007 campaign known as the "Do-It-Yourself All-Star Contest." The idea was to give consumers a chance to enter a contest where they could show off a recent home improvement project and then get friends and families to vote for them online. Wentworth was extremely pleased with the results because they created a huge buzz and got many potential customers to the company's Web site (truevalue.com).
More than 80 percent of the entrants — 173 total — created True Value-branded micron badges (which could be sent via E-mail or networking sites like Facebook.com) to promote their contest entry to friends, and some took out ads in local newspapers. In the three-week timeframe, badges were passed on to almost 10,000 consumers, which is a 35-percent pass-along rate, and contestants received 4,339 votes total.
Professional Tool Manufacturing, an Ashland, Ore.-based company that makes shop tool sharpeners is also heavily focusing on viral marketing. "Word of mouth is taking a new direction with online opportunities," says Kevin Blodgett, vice president of marketing, ProTool. "ProTool is tracking and encouraging online reviews and discussion about our products. In fact, the high-end Work Sharp 3000 has received a tremendously strong set of online reviews on bulletin boards, blogs and other tool sites."
As more distributors move online, there will be more opportunities to conduct DR campaigns to drive sales both on and offline. Spaulding says that LENOX will be taking advantage of the Internet and viral marketing in 2008. "LENOX has slated 2008 as the experimental year to uncover the power of social and viral marketing activities," says Spaulding. "We believe that the Internet is now one of the primary influencers of mainstream media. Campaigns start online and gain buzz in other traditional channels."
DRTV: A Necessary Tool
Print DR marketing is still a strong contributor to the success of the hardware industry. It's a great way to reach consumers nationally and offer them coupons and buy-ins for local retail. But in order to really reach the mass market, experts say that television is a must.
"Tool guys are very suspect of the hype. Great demonstrations are what convert them over," says Doug Garnett, president and CEO of Atomic Direct, a Portland, Ore.-based DRTV agency, and a member of the Response Editorial Advisory Board. Garnett says marketers need to tell the customer what the product can do, realistically. "I continue to see advertising to DIYs that's created by teams who have misguided fantasies about the rewards of building it yourself. You'll succeed a lot faster and better when you reflect the DIY realities," says Garnett.
What makes DRTV work? It's the product demonstration, pure and simple. The demographic for those that buy hardware is extraordinarily varied and it's hard to have targeted media opportunities that reach the audience well. Magazines and radio are often too small of an audience reach. "TV hits a broader audience at an excellent cost and is a great opportunity for hardware manufacturers to break through with their communication," says Garnett. "It may be the one place where hardware manufacturers can reach the total DIY market."
ProTool's product line includes the Drill Doctor drill bit sharpener, Darex industrial tool sharpeners and the Work Sharp general tool sharpener and wood tool sharpeners. DRTV is a major component in marketing for the company, and the products are eventually sold in home center stores, hardware stores and professional channels.
"Given the subtlety of the impact of sharpening and grinding products, we need long-form to make this branding meaningful," says Blodgett. The company also uses DRTV to reach the range of groups buying hardware. In fact, Blodgett says demographics are an inadequate way to describe the market.
"You have to look deeper at the other ways of segmenting markets," he says. "For example, our Drill Doctor has sold to a very experienced DIY. On the other hand, the softer products — like the Sears hand tools sold in the 1990s — appeal to a broad base of less experienced DIYs. Therefore, when done right, DRTV has impact on a wide range of consumers."
ColdHeat, based in Bellevue, Wash., designs and develops cooling and heating technology solutions, many of them hardware-based. Of the 18 products in four market segments, one of the best selling products is the ColdHeat Classic, launched through DRTV in 2003.
To date, the company has sold more than 5 million Classics via DRTV and retail. "We have traditionally launched products using DRTV to build broad awareness and demand. DRTV has been an extremely successful brand builder for ColdHeat," says Aly Johnsen, communications manager for ColdHeat. "Even today, two years after we stopped using the spot for the soldering tool, the recognition and consumer playback of those spots is extraordinarily high."
Though the company has dabbled in radio, print and the Internet, nothing has compared to its success in DRTV. The channel allows for great flexibility to test, modify and retest a campaign. "DRTV is efficient, and often we can repurpose our messages to be used in the retail environment to educate and reinforce our product strength," says Johnsen.
Taking Products to Retail
After successfully branding a hardware product on DRTV, the next step is retail.
"For every individual who buys from TV, another 10 to 20 will buy at retail," says Garnett. "Companies who continue to believe it's all about profit from TV are missing the big profit opportunity." In this way, big-box stores don't necessarily have to be an adversary of hardware manufacturers. In fact, large chains can launch a large generation of sales.
"Our experience has been that DRTV and retail work hand-in-hand," says Johnsen. "We have constructed our spots so that they can be used in the retail environment to reinforce our messages and brand benefits." Once the recognition is out there, ColdHeat sells products on the Internet, in catalogs and in more than 14,000 retail locations around the world.
"Once millions of dollars have been spent on DRTV to create the brand, to educate consumers of all the key selling benefits and you have made a profit, then the product is ready to sell itself off the shelves of hardware retailers," says Medved. "The benefit of a hit DRTV hardware product is that the brand and benefits are known, so the sale at retail is quick and easy."