Generating leads by the thousands

I have recently started a tourism promotions business. In short, the idea is to increase tourism in my local community and to make the effort self-sustaining such that it need not be funded with public dollars. In order to create and maintain this market, it is necessary to sell a large number of vacation packages to a market that does not exist. A previous effort to generate business in my community was attempted by a government agency who spent a million dollars on television advertising with very little success. So what does one do to convince the tourist business community that there is a viable way to bring business to the area without wasting a million dollars and risking failure?

In order to win the hearts and minds of my fellow merchants in tourism, I have turned to something that I have heard described as guerilla marketing. The idea is to get a lot of value from an inexpensive, targeted approach. In this case, we will have a drawing and give away 50 ski vacations to members of the target community. This drawing will generate nearly a million leads which will be followed up with calls from a professional call center. The following paragraphs will describe how we will carry this out.

We have chosen a large city in the northeast as our target market, largely because of its proximity to our center of tourism. We will find a local sponsor who currently services all of the convenience stores, restaurants, bars and grocery store in this city who will distribute the marketing material for the drawing. The marketing materials consist of the boxes that the entry blanks will be deposited into as well as the entry blanks themselves. We will distribute to at least 1000 businesses and each location will have at least 1000 entry blanks, hence over 1,000,000 potential entries. Each person who enters the contest is likely to be someone with an interest in skiing and therefore a good prospect for our ski packages. After obtaining the names, addresses and phone numbers of these prospects, we will employ a professional call center to offer each participant a discounted vacation.

The cost of this promotion will be primarily the cost of printing the entry blanks, entry boxes and a small amount of radio advertising. By inviting the radio station to be an additional sponsor, the amount of advertising can be multiplied by an additional factor over simply purchasing radio time from the station. The cost of the priniting and air time on the radio can be offset by advertising on the entry blanks which can be sold to the local hotels and tourist attractions. In the end, this promotion can be executed with little or no money invested other than the advertising dollars of the the tourist businesses who will benefit from the promotion. The vacations themselves can also be provided by sponsors in lieu of actual cash sponsorships. The call center can be paid a per sale commission so that the per sale cost can be guaranteed.

This approach offers a greater opportunity for success than can be offered by general PR programs or individual efforts of the companies who will participate. Another benefit if this approach is that the leads generated can be used on other promotions. And yet another benefit is the advertising value of the 1,000,000 entry blanks that will be distributed all around the city. This advantage can be further exploited by putting the web address for the region and many of its businesses on the entry stub that the participants will keep and take home with them. This idea can also be adpated to other types of businesses or products.

Good luck with this concept and I hope it will prove usefol to many of you.

Is this like what the fitness companies do in restaurants and coffee shops with the drawing boxes at the cashiers?

I do not know how the fitness centers market themselves, Marcus, so I can't say for sure. Certainly this concept is not a new one. I have seen other drawings for prizes spondored by various companies to obtain prospects for their products or services. Many times, the participants in the contests will be added to a mailing list for catalogs from the company or will be called afterward and offered a free gift to visit the place of business where a sales pitch will be presented. I have seen time share companies in tourist areas use this approach.

In our case though, Marcus, we will be enhancing this approach by putting a four color brochure in each participant's pocket with the web address of the promotions company to further create a lasting impression. Rather than a simple white entry form with blanks to fill out the name, address and phone number, the stub of the entry blank will be serialized with a number matching the entry itself. The information on this stub will provide the participant witha great deal of information about the region and the sponsors and will enable him or her to learn more via the web. Of course the stub will be required in order for the participant to claim a vacation should he or she be one of the winners.

Originally Posted by rlabston This drawing will generate nearly a million leads which will be followed up with calls from a professional call center.

That's nearly a 100% pick up to entry conversion rate. Is that realistic?

Originally Posted by Mikey That's nearly a 100% pick up to entry conversion rate. Is that realistic?

Good point, Mikey. And one that I did not completely overlook. In speaking with partners in this venture, we usually speak in terms of a 50% rate of valid entries, recognizing that we will get many duplicates and phoney entries. We could probably achieve a higher rate of valid entries if we had experience in this area. I suspect, for example that something as simple as glueing the entry forms together into a booklet would reduce the spoilage rate. By the way, I assume this is what you are referring to when you say pickup rate? Since we have a sponsor visiting each location at least once or twice a week, we will be able to monitor the results and make early adjustments in locations if need be to increase the response rate.


We estimate that if we get 50% valid entries, or 500,000 unique leads, we should have no problem expecting a sales response of 3000 which is 6/10 of 1% from a direct telephone marketing effort. My understanding is that 2%-4% is typical for direct mail and telepone campaigns should produce better results than direct mail. So, even if we receive only 300,000 (30%) valid entries, we would need only a 1% response from the telephone effort to achieve our goal of 3000 sales.

With monitoring a 99%+ "pick up rate" is very realistic.

A 50% "pick up:entry" conversion rate is great.

How many deals would have to close for this project to break even or what call:conversion rate is necessary?

Originally Posted by Mikey With monitoring a 99%+ "pick up rate" is very realistic. A 50% "pick up:entry" conversion rate is great. How many deals would have to close for this project to break even or what call:conversion rate is necessary?

We are looking at putting $150,000 into this promotion which represents mostly printing and radio air time. However, all of this money will come from sponsors whose businesses will be promoted along with the contest, I anticipate the two largest sponsors will be a casino/hotel and the ski facility, each of which will be asked for $30,000 sponsorship.

This means that ourpromotions company will have zero dollars invested in marketing the promotion. The promotional c osts of the ski packages will be zero. The largest cost associated with selling these ski packages will be the commisions paid to the call center.

For the ski facility, there is no cost associated with additional customers coming to the mountain. It costs the same to operate the lift with 100,000 visitors as it does with 103,000 visitors. So, at $35/lift ticket, to recoup $30,000 would require about 850 additional visitors.

For the casino/hotel, the average room price is about $150 per night. Again, it costs them nearly as much to heat the empty room as it does an occupied one, so an extra 200 guests for one night each would pay the cost of their sponsorship.

If you want to add enough extra guests to make put the advertising costs in line with the gross sales, you would have to consider look at industry specific figures for advertising. I suspect that 10% qould be a conservative figure for the casino/hotel, so I suspect that an additional 2000 room days would be reasonable.
For the ski mountain, probably 20% advertising is more likely. That would mean an additional 4500 daily lift tickets.

Our target is 3000 guests at 4 nights per guest or 1200 additional room/lift days. This represents 1% call:conversion ratio if we are running at a 30% pickup rate for the entries. All these numbers appear to be extremely conservative to me. I'd be interested in hearing some other opinions though.

Incidentally, one factor taht I did not mention is that this promotion requires the target market to obtain passports to cross the border between the US and Canada. Any thoughts on how this might impact the value proposition?

Originally Posted by rlabston Incidentally, one factor taht I did not mention is that this promotion requires the target market to obtain passports to cross the border between the US and Canada. Any thoughts on how this might impact the value proposition?

How much can that one variable affect your projections?

Originally Posted by Mikey How much can that one variable affect your projections?

That is the $3 million question, Mikey. I don't think it will have to great of an impact since the promotion will be conducted well in advance of the actual vacation dates. But many of the pundits I have spoken with have raised this question. Then they have followed it up with examples of big companies which have turned away from the US for their marketing efforts because of this concern. So it will be interesting to see who is right.

A friend of mine who goes on a lot of cruises told me that some places are giving rebates of up to $100 towards the cost of getting a passport. Not everyone knows what is involved with getting a passport so you could have a "How To" page on your website to demystify the process.