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Private Sale Direct Mail

Furniture World Magazine


A good list and detailed preparation brings excellent returns.

Private sales can be one of the most successful retail sales promotions from the perspective of ROI. However, private sales are an even more powerful marketing tool because they turn prospects into customers and assist retailers in creating and maintaining a customer database.

Private sales are by invitation only and typically last for one day. They are launched with a direct mail campaign to a highly targeted group of prospective buyers. Prospects are invited to your sale via a personalized letter or postcard, which then serves as their invitation for admittance to the sale.

They may sound easy, but private sales take planning to be successful. Our rule of thumb is six weeks of planning to effectively execute this promotion.

If you’re going to invest the time and money in a private sale, understanding the whys is just as crucial as the hows. The whys can be grouped into two categories: Why do private sales work? and why run a private sale?

Why Do Private Sales Work?
There are two basic reasons Private Sales work—the power of direct marketing and human nature. Private sales depend greatly on the tactical strengths of direct marketing. Utilizing direct mail has certain advantages over other marketing media:

•Direct mail virtually guarantees 100% penetration of the market—your letter will get in the hands of everyone you target. Of course, this is of no value if you don’t target the correct prospect (see "Why Run a Private Sale" section below).

•Most people do look at their direct mail. Believe it or not the US Postal Service tracing services indicate that 80% of direct mail is looked at or read.

•Direct mail is a more cost effective method of targeting prospects than newspapers. Newspapers have experienced decreased circulation coupled with increased rates.

•Television is extremely fragmented—with over 100 channels to choose from, how many do you have to buy to reach your potential customers?

Humans and their buying psychology play a large part in the success of private sales as a promotional tool:

•The limited time nature of the sale instills a "sense of urgency" in your customers and motivates them to buy now. That is one of the reasons a one-day sale is much more effective than multiple day events.

•The "private" aspect of the sale makes those attending feel special and encourages buying.

•Applying a live pre-cancelled stamp to a bulk mailing (a standard Direct Mail USA procedure) increases the personal impression and exclusivity of the letter and the opening rate of the mailing.

•The simplicity of the invitation makes your prospects feel that the letter was written directly to them by one of your staff.

Why Run a Private Sale?
This is the easiest question to answer: ROI and an increase in customers.

Return on Investment: A private sale can easily pay for itself and generate substantial returns. Take a few minutes to run some numbers. Assume for example, a mailing size of 10,000 and a .5 to 2.0 percent response rate. Then estimate your potential profit by plugging in projected average ticket, close ratio and margins as well as mailing and other projected costs. You will easily see the potential of this powerful tool.

Increase in Customers: The most important reason for running regular private sales is its ability to assist you in developing a customer profile—thus increasing your customer base and sales.

The letters collected at the sale can be analyzed based on the respondents’ demographics. When you run your next private sale, you will be able to further refine the target mailing list based on actual knowledge of your customers, not the educated guesses you made the first time. Again, this is a crucial service your private sale vendor should provide for you.
Each subsequent sale can lead to further refinement of these demographics so that the cost of mailing (the largest expense item of a private sale) decreases. The overall number of prospects to whom you send your invitation is much less crucial than the quality of those prospects.

A prospect that most resembles your current customer is by definition most likely to become a customer. Private sales are a proven tool to identify this type of prospect and turn them into customers.

How To Run a Private Sale
The hows are fairly cut and dry, but still take careful planning. When choosing a direct mail vendor, ask questions about mailing list expertise, after-sale analysis and follow-up. Private sale letters are basically a proven formula of offer and urgency. The quality of a vendor’s mailing lists and their customer analysis based on the sale’s attendance will in the end help you to produce better results for your next sale.
Select a date: Private sales are run throughout the year. Although the length of the sale may vary, our experience has been that one-day sales tend to generate the best results by far. Besides, single day sales make great stand-alone sales promotions, and they can also be used as solid lead-ins to longer promotions.

Research also suggests that Thursday is the best day of the week for a sale, although this is certainly subject to local variances. In addition, we suggest that you be sure to allow the customer enough time to make selections and provide your sales personnel with sufficient time to write all of the orders. Thus, a private sale, especially for the furniture business, should last anywhere from 7 to 12 hours.

Also keep in mind the time of year—for example, during the school year, sales on weekdays should start no later than 2 p.m. And don’t forget the religious practices of your store’s community, especially for those Saturday and Sunday sales—When are your customers finished with their church activities? What are the major Jewish or Islamic holidays that could lower your sales’ success?

Prepare the mailing list: This can be an easy effort if you already know your customers’ demographic profile through an analysis of your existing customer database. You just pull a list of households within your store’s trading radius with the same demographics as your current customers.

If you don’t have a database (or it hasn’t been updated in years) or a customer profile-- now what? With the assistance of a list provider, private sales company, or mailing house, you obtain a complete list of households within your store’s zip code radius. Make assumptions (or educated guesses) about what types of people currently shop at your store in order to whittle the mailing number to around 10,000. Think about your customers’ five basic demographics: age, marital status, income, distance from store, presence of children. If you’re not sure about certain characteristics, keep your ranges large. Once you have the private sale and begin building that all-important database, you will know much more about who your customer is.

Compose your invitation letter: Every private sales letter is somewhat different to meet the individual needs of your store; however it is best not to deviate from a proven formula, especially for your first few sales. That formula includes:

•Keep it simple. The simplicity of the letter is what makes it so personal.

•Mention brand names. Customers recognize brand names, and this lends credibility to your sale. If you have factory reps attending, be sure to mention this in your letter.

•Mention that this sale will not be advertised to the general public and remind the recipients to bring the letters with them to be admitted. Be sure to collect and keep the letters.

•If you have multiple locations, hold the sale at only one location at a time. Pull in available sales staff from other locations to service the store holding the sale.

•Somewhere in your letter, perhaps in a P.S., encourage people to bring a friend, but use the letter for admittance.

•Last, but definitely not least, include discounts and financing options. The response to your letter will be higher if you present an attractive discount to the consumer. You do not need to sell product at a loss; rather by properly presenting selective discounts you create the impression of a strong value. Time-sensitive price discounts and financing offers create a sense of urgency and creative financing offers increase your returns by widening the pool of prospects who can afford to buy big at your sale.

Prepare your store: A private sale should be festive and exciting to both customers and staff. In order to accomplish this, you need to retag your entire store with special Private Sale price tags; decorate with balloons and banners; cover your store windows to emphasize the "privacy" of the sale; provide refreshments; offer door prizes or drawings; and take whatever steps are necessary to make these prospects feel like the select group they are—eventual customers.

Two other crucial elements:

•Set up a greeting table at the front door to collect invitation letters, sign in those who have forgotten their letters and introduce the customers to their sales representatives. This table must be staffed at all times.

•Dress the sales people in something different from their everyday garb — tuxedos, special sale shirts, lapel flowers, etc. have been used successfully.

Prepare your staff: Involve your whole staff in running your private sale. Several weeks before the sale, hold a staff meeting to explain the planning and get their input—most importantly let them know that this sale represents an opportunity for substantial commissions.

Set Up A Greeting Table At The Front Door To Collect Invitation Letters,
sign in those who have forgotten their letters and introduce the customers to their sales representatives. This table must be staffed at all times.

Vic Northern’s is a Private Sale Specialist, with over seven years experience in designing, executing and tracking private sales for Direct Mail USA. His expertise also lies in analyzing and interpreting the results of each private sale in order to make the following private sale even more effective--a key service provided by Direct Mail USA. Questions about this article or any aspect of direct mail marketing can be sent to Vic care of FURNITURE WORLD at editor@furninfo.com.