How much do you pay for a customer? Under a dollar? Ten dollars? One hundred? Some of the new e-commerce businesses are paying hundreds of dollars to attract one customer to their site who will actually make a purchase, without the guarantee of a return visit.

No wonder dot-commers have taken such a hit in the stock market. The mere cost of getting customers to visit their websites has doomed many Internet businesses from the beginning. Marketing and advertising costs are very high and the return on investment is very low in this volatile market.

Fortunately, hvacr contractors are not battling it out on the World Wide Web, looking to sell products and services to customers at opposite ends of the globe. Ours is a more regional market, where the dollars are spent marketing to customers in the neighborhood or across town.

But we still face the same problems as the e-sellers: the costs associated with attracting and retaining customers.

Marketing professionals will tell you that, outside of word of mouth, one of the most cost-effective ways to sell your wares is by direct mail. The cost per piece is very low (sometimes fractions of a cent), and the risks are low, too.

Direct mail can target a specific zip code(s), or it can be expanded to a large customer base, a whole city for example. Although direct mail to some consumers is nothing more than junk mail, it still makes a physical appearance in the customer’s home, albeit sometimes brief, and the longer it sits on the counter or stays attached to the refrigerator, the better chance contractors have of getting a call when service is needed.

’Fridge Fondness

I’ve always liked the idea of giving away refrigerator magnets. I used to sell those pleasant little imprinted ad specialties and one of my favorite promotions was to sell refrigerator magnets to customers for as low as $0.18 each for a business card-sized, one-color im-printed magnet. I think you can still get them for around $0.20.

So let’s say you order a minimum of 500 magnets at $0.20 each — a whopping $100 investment. Then you mail them out in a bulk mailing (inserted in a #10 envelope), which adds no extra weight to the letter (it’s a thin magnet). It costs another $0.25 each (estimate) to mail the letter with the magnet ($125). That’s a $0.45 investment per piece.

Now, let’s say that 20 people out of the 500 call you and 10 wind up purchasing your product(s) or services. Let’s be generous and say that you wind up selling one furnace and one a/c unit and the other eight are clean-and-inspect calls. Lump them together and you gross $5,000, for an average sale of $500.

You’ve spent $225 to make $5,000. It cost you $22.50 per customer (10 buyers). Since I don’t know your mark-ups or overhead, I won’t guess your profit. However, I’m willing to bet that you’d be satisfied with these results.


The dot-commers might have to spend $100 or more per customer, which they’re used to. It sometimes costs that much to attract a customer. But they don’t get a chance to meet their customer in person, roll out the red carpet, or leave a lasting impression from a personal visit by you, your salespeople, or your service techs.

The e-sellers are spending a lot of money to attract an unknown to their websites. We have a tremendous advantage in our ability to sell and service one-on-one.

And what about keeping your customer? Do you think Web surfers will automatically go back to the e-seller they first did business with? Maybe. But the chances are much better for retaining a customer if the personal touch is added.

It sounds so easy — and it is.

So if it costs you a little extra to keep customers coming back to your brick-and-mortar business, think of how much they appreciate your personal touch. And those 10 people who called you but didn’t buy? Add them to your mailing list and send them a thank you note for calling. They’ll appreciate that, too.

Low cost for attracting and retaining customers and the ability to add the personal touch — I’d say we score a double whammy.

Hall is business management editor. He can be reached at 248-244-6417; 248-362-0317 (fax); (e-mail).

Publication date: 10/09/2000