We Measured
- Which is better to sell more Christmas trees – market to existing (spring) customers or market to the local population at large?
The Business Hypothesis
For two Independent Garden Centers in Illinois, a business hypothesis was formulated to increase sales of Christmas trees in the most cost-efficient way. The hypothesis was “it’s more effective to market to the existing customer base than to locate new customers within the nearby vicinity”. The hypothesis was based on the assumption that it’ll be a lower lift to convince existing spring customers than local non-customers to purchase a Christmas tree.
Data Sources
- Newsletter List
- Mailing Address List
- Facebook & IG Followers
- Exclusion List (previous tree buyers)
- Facebook/Instagram Local Targeting
- Google Display & Search Ads
- Zipcode-based Mailing List
- Exclusion List (previous tree buyers)
A/B Test Implementation
Each test case had a budget of $1,500. For existing customers, the budget was allocated between the cost of a postcard mailer with a discount code and 3-4 different boosted ads and posts on Facebook/IG. For non-customers, the budget was allocated between a postcard mailer with a (different) discount code, 3-4 Facebook/IG ads to a local audience, and a Google Display & Search ad campaign to a local audience.
To make the two test cases as comparable as possible, the postcard mailer budgets were similar but not identical, something which wasn’t possible due to the different charging methods for individual-based vs. zipcode-based.
For both groups, great care was taken to make sure persons who had previously purchased a Christmas tree were not exposed to online ads or received a postcard in the mail.
Fully realizing the test was far from perfect, the hope was that the results would be clear enough to with reasonable confidence, validate or invalidate the business hypothesis.
Results
- Facebook/IG advertising had a 27% higher conversion rate for non-customers
- Postcard mailers to potential customers had, surprisingly, a 21% higher conversion rate
All Garden Center Marketing Efforts Are Local, And May Differ From This Measurement..but…
- The original business hypothesis was proven to be false. Marketing dollars for these two garden centers were better spent on acquiring brand new customers than on convincing spring customers to also purchase a tree
- This was the opposite of the expected result, but the indicators were sufficiently strong to invalidate the belief. For some reason, it’s easier to convince brand-new customers to purchase a Christmas tree than to convince customers who buy garden items in the spring.
- There was anecdotal evidence the main reason for this result was that the pool of potential tree buyers was significantly larger amongst non-customers, and so despite the unfamiliarity with visiting the garden centers, the larger pool of people is more important than brand familiarity.
