A few years back, American Home Craft had the unfortunate experience of being the first home improvement company in the United States to be fined for a violation of federal Do Not Call restrictions on telemarketing. The San Diego-based contractor — which installs windows, siding, doors, and cabinets — survived that misstep, but its managers recognized that from that point forward customer leads were going to be harder to come by. Much harder. That's one reason why, in 2005, American Home Craft launched its first sweepstakes direct marketing campaign.
Last year, the company's sweepstakes garnered 10,000 entries (out of around 500,000 pieces mailed), all of which were logged into American Home Craft's data-bank. “We periodically call [those entrants], with their permission,” says general sales manger Tom Farmer. “They indicate what they would like to win. That tells us that they probably have a need for that product. So we call them to ask if they'd like an estimate or inspection, to see if they have an interest in the product that they might be winning.”
Winning a house full of windows or a siding job is the inducement. But for American Home Craft, the point is names. “We do sweepstakes to collect data,” Farmer says. “And data is the key to marketing.”
POPULAR MARKETING TOOL Sweepstakes have long been a popular marketing tool for finding and attracting new customers. But during the last several years, they have caught on big time with many large home improvement companies. “It's a way to build a business,” says Rick Menendez, vice president of marketing for Melani Bros., in Yorktown, Va., which is one of the industry's strongest advocates for sweepstakes.
Melani Bros. got into sweepstakes four years ago. At the time, nearly all of its sell-furnish-install leads had vanished — along with nearly $2.4 million in sales — when home improvement retailer Lowe's discontinued its in-store sunroom construction referral program. That program was, at the time, Melani Bros.' major lead source.
Adversity bore opportunity, and sweepstakes now produce leads that, directly or indirectly, account for half of Melani Bros.' annual sales. The company's database has grown to more than 150,000 potential customers, whom the firm touches base with every six months via newsletter.
Melani Bros. developed its sweepstakes program with Jerome Group (www.jeromegroup.com), a St. Louis-based direct marketing firm whose services Menendez promotes to other contractors through Sudden Impact Marketing (www.suddenimpactllc.com).
WHO CAN DO IT? Still, sweepstakes aren't for everyone, say those involved in them, especially if a company specializes in just one product or doesn't have solid telemarketing and outside sales support. Any contractor venturing into sweepstakes had better know the law and be prepared to encounter resistance from homeowners, who understandably worry about getting bilked by swindlers who use sweepstakes to prey on innocent and gullible consumers.
In fact, Farmer says that the retired couple in Auburn, Calif., who won the grand prize of $15,000 in new windows in American Home Craft's sweepstakes last year, was skeptical about letting the company's president, Brad Smith, visit their home to go over details about installing the windows.
But when sweepstakes are legitimate and click with consumers, they are the gift that keeps on giving for many businesses, including home improvement companies. “The goal is to provide a steady stream of leads throughout the year, and there has not been a market in which [sweepstakes marketing] has been tested where it hasn't been successful,” says Michael Wegmann, Jerome Group's vice president of strategic partnerships.