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Reach out to new residents with customizable gift certificates.

Many stores offer new-residents packets that contain gift certificates and welcome notes to invite new neighbors into the store with hopes they'll become new customers.

But when you put together these offers, remember the client base you're serving.

Most of the customers to TAGS Ace Hardware, a two-story store in Cambridge, Mass., that includes a kitchen store on one level and a traditional hardware store on the other, live in multiple-unit dwellings. And most are professionals with a larger amount of disposable income.

Store owner Simon Shapiro kept these facts in mind when he began working with an outside company, Our Town America, to put together a new-resident marketing program for new homeowners or renters.

"Many of those gift certificates include a free key or $5 off your first purchase," Shapiro says. "Those are great, but they weren't a good fit for us. Our customers have larger disposable incomes and aren't going to come in to our store just for a free key."

Shapiro designed his own gift certificate. He chose one that gave customers $20 off their purchases and worked with the company to select six target ZIP codes. Each month, the coupon is sent to new homeowners in each of those ZIP codes.

"On average, 17 to 20 percent of families move each year," OurTown America CEO Michael Plummer says. "Within that first year in their new homes, they could be spending thousands of dollars on home improvement. For Simon, a gift certificate for $20 is nothing in the grand scheme of things, because if the customer comes in to Simon's store and enjoys a positive experience, Simon has now gained a customer for life."

Shapiro allows customers 90 days to redeem their gift certificates. "We've found people like to use them later rather than earlier," he says. "We believe they like to get settled before they shop at our store."

Each gift certificate comes with a barcode so staff can keep track of how many are redeemed and where they are from.

"We have a redemption level of 12 or 15 percent, and we've received very positive comments about them," Shapiro says.

Whether you work with an outside vendor like TAGS did or you make your own program, Shapiro says it's important to know your customers. "This program offers a very valuable tool that helps us understand our market. I feel that as a locally owned, independent business it's important to stand out, and this program allows us to do that."

He says his annual advertising expenses make up less than 2 percent of his total budget. Other than the gift certificates, he sells lawn and leaf bags with the store's name printed on them and hosts a customer appreciation weekend each year.

"We tried circulars and newspaper inserts and a few other things, but those just didn't work as well," Shapiro says. "With this, we've gotten some very positive comments not only about our gift certificates, but about our store. It's been a win-win situation."

Learn More About TAGS Ace Hardware in next month's special housewares supplement.

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Title Annotation:PROMOTIONS
Publication:Hardware Retailing
Date:Feb 1, 2014
Words:511
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