Flyers in Retail – Marketing Monster Tool and Large Scale Waste
In the Czech Republic 4 billion leaflets are printed annually, that is 390 pieces per person and it is an average of at least one flyer per person per day. From the statistics we know that around 80-90% of them are delivered, which means that about 400 millions of leaflets per year don’t end in the mailbox. The question is, where are they? In the trash, in recycling or simply not printed at all.
Usually it is an error on distributor’s side and he simply did not distribute them. It is systematic problem, when the distributor doesn’t deliver to some places or doesn’t have enough people to do so, so he recycles the flyers. This increases the number of mailboxes versus reality. Sometimes also the printer prints less flyers than he is paid for.
But this is only a problem of “non-distribution”.
Leaflets are working very well historically. For the cost of produce and delivery they bring very good results. It is similar to PPC advertising. If the PPC ad costs 18 cents and delivers 11 cents, there is no reason for me to do it. The question is, if I could with better targeting make 25 cents.
This is the same problem we can see with flyers. It’s not just about the inefficiency of spreading, it’s all about the performance of the media. And this is the area where CleverAnalytics in cooperation with FreshRevolution can bring real value to our customers, instant payback.
Real catchment area
The first step is to determine the distribution areas. These are usually set by determining the catchment area of a specific stores for which we prepared marketing campaigns. Standard and the simplest way (and the most common one) is to take in consideration radius of 10km around the store. Then I will be interested only in all addresses with the constant distance of 10km from the store.
The reality is different. If we include in the calculation demographics, incidence and multitude of the target group, commuting to work and accessibility by car, public transport, walking and cycling, for example, within 15 minutes, the catchment area will look completely different. Moreover, if we consider also competing stores, historical data from sales or information from the loyalty program, we will get to much more refined conclusion. Each additional factor adds to the accuracy.
This image demonstrates the difference in catchment area. With this approach you can not only save up to 30% of leaflets, but you can also increase the quality of targeting substantially and thus your leaflet campaign will yield better results.
You can see that the real catchment area is completely different and therefore even the delivery will differ. You will need less leaflets and you can target areas that actually visit your shop. This example also shows the influence of work-related commute between two towns Jablonec and Tanvald. In Tanvald is located shop of the same brand, but part of people travel to Jablonec for work, where they also shop. Similarly, people from Tanvald’s satellite areas are drawn to Jablonec or neighbouring Liberec, where they have it closer.
Distribution to small towns
This image shows the catchment area of the store in Telč. In yellow you can see the town Volevčice. It has small potential (when it comes to annual turnover in CZK), but very high (high above average), market share (almost 30%). This means that this region annually generates only 5% of the total retail potential, but a third of all purchases will take place at the store. In terms of leaflet distribution holds this area high importance, although it would be otherwise overlooked. Even more significant it is for town Řídelov, which would not be taken into account in the classic model of distribution, due to the distance. Yet it has the same parameters as Volevčice - relatively small potential but high market share. In towns such as this it can lead to the paradoxical phenomenon that people buy in the store “X”, but do not get any leaflets from it, while receiving leaflets from stores “Y” from another city, where they don’t go. These customers often even feel cheated!
Having information about, let's say, areas which have experienced delayed orders or being able to filter customer satisfaction ratings via maps will inevitably enhance your business, not to mention giving you more satisfied customers.
Where the distributor won’t be bothered to come
Another interesting phenomenon in the distribution of flyers are small, tucked away, confusing and one-way streets in big cities. Sometimes it even happens in end of long streets. These are the places where the distributors won’t deliver. It would seem that it is a small unit of addresses, but in larger cities it is a relatively frequent phenomenon. Our customers can identify these places in advance and ensure the delivery or they can place strategic checks in these places.
Location intelligence streamlines the way businesses process information. Graphs and charts are all very well, but visualising all of that data on maps gives you a completely different perspective. The many variables businesses have to contend with can at times seem overwhelming. But acting strategically and making more informed decisions only happens when you get the right answers.
Delivery to loyal customers
The above phenomenon is directly related to delivery to loyal customers. Again, we can have an area that is in terms of the potential of completely insignificant value and with standard methodology would be excluded from the selection.
In this particular case town Heraltice u Třebíče has the ratio of loyalty club members to frugal households almost 30% (37 from 131). The results again show that it is highly important to care for such loyal customer base and to motivate them to greater purchases with leaflets.