The Secret To Turning New Movers Into New Customers

by Jay Siff

If you follow the television industry, you know advertisers covet the 18-to-34 year old audience more than any other.  In fact, they will pay a premium to reach this unique demographic.  Why? 

Because statistically, younger buyers are the most willing to try new products and brands.  Their buying loyalties, by and large, have not yet been set.

Now let’s transfer this thinking to the town or city in which you do business.  There is a group of potential customers in your area who have the same “blank slate,” if you will—a group that hasn’t forged its merchant loyalty and is just waiting, even hungering, to make those buying connections.

Who is this extremely desirable group?  People who have just relocated to your area.

Massive Market

Most businesspeople don’t realize that new movers represent a huge, underserved market.  Over 46% of all Americans, in fact, moved at least once between 1995 and 2000, according to U.S. Census Bureau figures.  What’s more, new residents represent a true cross-section of household units—families, couples, and individuals alike. 

Because new movers typically transfer to a new location due to a major life transition—marriages, new jobs, births, retirements, and divorces are common reasons—they face a host of new challenges.  Not only are they often lonely and unsure in their new surroundings, but all the social and community connections they had before, from neighbors and friends to dentists and hairdressers, are now severed and must be replaced.

Research has found that movers go through five stages of transition: Separation, as they say goodbye to their old connections; Transformation, the physical aspect of the move; Early Integration, encompassing the first six months in the new community; Later Integration, the subsequent period of adjustment; and Maintenance, the indefinite period once the resident is finally settled in.

It is during the Transformation, Early Integration and Later Integration stages that new residents represent the greatest opportunity for direct marketing.  According to the U.S. Postal Service, these stages represent a time of “hyperspending,” as movers buy everything from new drapes to Chinese carryout.  On average, new residents spend $7,100 for goods directly attributable to their relocation.  During the first 24 months after a move, an estimated 80% of new residents will try new products and services from local businesses.

Typical Approaches Wrong

Marketers, of course, have long known that new movers are a source of new business.  Trouble is, most try to reach such folks with the same conventional—even tired—promotional offers they use with everyone else.  Big mistake.

To truly turn new residents into customers, you need to offer something more than an everyday promotion.  You need to provide not only sufficient incentive for a response, but also a disarmingly sincere gesture that clearly states you want the person as a permanent customer.

How?  Through a giveaway.  We’re not talking about a token freebie here, or a gift-with-purchase offer.  If you’re a restaurant, give a free dinner.  If you’re an oil change shop, give a free oil change.

When packaged the right way, in the form of a personal letter or customized gift certificate, new resident product giveaways are proven to be two to five times more effective at creating new, steady customers than traditional offers. 

Lifetime Value

And lest you think the price of a giveaway is too high a price, consider this.  A family that orders $25 of pizza most weekends, over a four-year period, generates up to $4,500 in revenue and a gross profit of roughly $3,500.  The lifetime value of an auto repair customer—that is, the amount of net profit a repair shop can expect from a customer, based on average turnover rates—is close to $2,000.  Isn’t that kind of business worth a one-time giveaway?

Eighty-seven percent of all direct marketers who have properly applied new mover promotional techniques have rated them successful.  Of course, it’s critical that once the person has crossed your door or placed an order, you deliver a positive experience.  If you do, you’ve done more than generate a response.  You’ve won yourself a long-term, loyal customer.

JAY SIFF is a principal of Moving Targets, a Perkasie, Pennsylvania-based provider of new resident direct marketing programs for small business.  Moving Targets has issued a white paper, “How to Overcome Retail-Customer Erosion by Capturing New Residents”, that explains how to tailor offers specifically to the needs of new movers.  For your free copy, visit www.movingtargets.com