This was a project I developed along with two more people for our Direct Marketing class for a small business in order to increase their database of customers.
4. Company Background
• Founded in 2005
• Family owned business
• Located on 1301 Polk
Street, San Francisco
CA 94109
• Traditional Thai
massage
Source: La Biang Thai Massage
8. Target Market
80% 20%
Female Male
Aged 25-45 Aged 30-60
Medium to high income Medium to high income
American Professional workers
Asian
9.
10. SWOT Analysis
Strengths Weaknesses
Comfortable local and nicely Very conservative family
decorated business
Certificated Thai traditional Low investment budgets
massage practitioners No customers database system
Well organized family limited amount of
business and easy to manage practitioners
Single decision maker Low advertising investment
Good reputation and positive No marketing expert position
feedbacks from customers
(Yelp.com)
Profitable business since its
inauguration
New second Thai massage
place
High foot traffic in its location
11. SWOT Analysis (cont.)
Opportunities Threats
Increasing alternative health Strong direct competition
care treatments demand Strong indirect competition
High awareness of spa centers (Others alternative health care
as a good option to relax providers)
Excellent customers retention Low barriers to entry in the
opportunities industry
Attracting offers for new and Different legal requirements
loyal customers for practitioners
Largest industry acceptance in Customers injury
California State
12.
13. Industry Analysis
• Based on non traditional services
Acupuncture
Massages
Yoga
Meditation
• Treatment for health problems
• Large industry acceptance in California state
• Revenue is expected to growth in next years
Source: IBISWorld
17. Competition
Direct Indirect
Suchada Thai Massage Chinese Massage
Bay Thai Massage Gym and Yoga class
San Francisco Massage Beauty salon and spa
Source: Yelp
18.
19. Direct Marketing Strategy
• Retain our loyal customers
Require more information to update database
• Acquire new customers
Use the new application form to correct
customers’ information
• Increase short-term revenues
• Expand target market for Thai Traditional
massage service
• Increase brand awareness
• Build in-house database
20.
21. DM One Year Campaign
The Offer
Register for a member got free continuity member
card
Buy 5 Traditional Thai massage get another 1 for
free
Direct Marketing Channel
Email
Direct mail
Duration
The offer start Jan 01,2012 – Dec 31,2012
25. S p ec
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This
ffer
won’
t ta k
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JOIN long
OUR
ME MB E
GET RSH
6M ASSA & IP
GES
FOR
ONL
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OF 5
.
“ARE YOU STRESSED? DO YOU FEEL EXHAUSTED??”
Help is here for you…. At
La Biang Thai massage
Nothing better than trying our Traditional Thai Massage
CALL US to make appointment today
http://www.labiangthai.com
1LBT000A
1.415.931.7692
Address: 1301 Polk Street SF CA 94109
Refer to this code or take it with you for the offer
27. RELAX…. Having trouble viewing this email? Click Here
With a Traditional Thai Massage @
La Biang Thai
Massage
JO
IN
NO US
W
5+
FR 1
EE
CALL US to make appointment today
1.415.931.7692
2LBT000A
Address: 1301 Polk Street SF CA 94109 Activate to this code to get the offe
29. Member ID card
La Biang Thai (415)931-7692
Traditional Thai Massage & Reflexology
1301 Polk St./ Bush San Francisco CA 94109
Customer's name Date Issued
Member's I.D.
You are our passion!! www.labaingthai.com
30. Member Form
La Biang Thai (415)931-7692
Traditional Thai Massage & Reflexology
1301 Polk St./ Bush San Francisco CA 94109
Become our member you will get more benefit…
Name: Last Name:
Address:
Email :
Member I.D. : (To Be generate)
31. Loyalty Member Card
La Biang Thai (415)931-7692
Traditional Thai Massage & Reflexology
1301 Polk St./ Bush San Francisco CA 94109
☼ ☼ ☼
☼ ☼ ☼Free
You are our passion!! www.labaingthai.com
32.
33. Media Plan
Media Unit/Format Quantity/ Frequency Total Qty
(Examples) Circulation/
Reach/
Impressions
Direct Direct Mail 5,000 3 15,000
Mail Package
E-mail HTML 5,000 6 30,000
Total 45,000
34. Time Table
1 Year Campaign (Direct Mail + E-mail)
Year One Circulation/Flight Dates
Month
Quantity Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Direct
Mail 33.33% 33.33% 33.33% 99.99%
Email 16.66% 16.66% 16.66% 16.66% 16.66% 16.66% 99.96%
• Sending out 3 times Direct Mail
• Sending out 6 times Email
35. Profit & Lost
Direct mail & Email Campaign
Assumptions
Unit Price $55
Shipping & Handling $0
Mail Quantity 45,000
266934
Response Rate 0.47%
Appointment Frequency 6
Average Order Size 1
Variable Costs
COGS 10%
Fulfillment 0%
Bad debt 2%
Total 12%
Fixed Costs
Overhead $37,692
36. P&L for Direct mail & E-
mail Campaign P&L
Response Rate 0.47%
Appointments/Sessions 1282.258041
Gross Sales $70,524.19
Returns $0.00
Net Sales $70,524.19
266934 COGS $7,052.42
Fulfillment $0.00
Bad debt $1,410.48
Total Variable Cost $8,462.90
Variable Marketing Cost $18,750
Fixed Marketing Cost $3,900
Total Marketing Cost $22,650.00
Overhead $37,692
Total Fixed Cost $60,342.31
Profit $1,718.98
37. LTV Calculation
Part 1/2
Year 1 Year 2 Year 3
Response Rate 0.47% 25.00% 35.00%
Appointments/Sessions 1282.26 272.48 343.32
Starting Customers 213.71 181.65 163.49
266934
Retention Rate 85% 90% 95%
Gross Sales $70,524.19 $14,986.39 $18,882.85
Returns
Net Sales $70,524.19 $14,986.39 $18,882.85
COGS $7,052.42 $1,498.64 $1,888.29
Fulfillment $0.00 $0.00 $0.00
Bad debt $1,410.48 $299.73 $377.66
Total Variable Cost $8,462.90 $1,798.37 $2,265.94
38. LTV Calculation (cont.)
Part 2/2
Year 1 Year 2 Year 3
Variable Marketing Cost
Fixed Marketing Cost
Retention Marketing Cost
266934
$500.00 $500.00
Total Marketing Cost $22,650.00 $500.00 $500.00
Overhead $12,564.10 $12,564.10 $12,564.10
Total Fixed Cost $35,214.10 $13,064.10 $13,064.10
Profit/Loss $26,847.19 $123.92 $3,552.81
Discount Rate (at 10%) 1.00 1.10 1.21
Net Present Value 26,847.19 $ 112.65 $ 2,936.20
Cumulative Net Present Value $26,847.19 $26,959.84 $29,896.04
Customer Lifetime Value $125.62 $126.15 $ 139.89
39.
40. Recommendation
• La Biang Thai Massage should start to launch
the continuity campaign
• Use Direct marketing campaign
• First year campaign use prospect list
• We propose that the business should change the
application form in order to keep customers’
information (Build in-house database)
44. Profit & Lost (cont.)
Overhead Calculation
Salary Pay
Operators : (12$*8)* 2= 192*4=768 $ ( Another five days operate by the owner)
Staffs : No Salary ( In hour they do massage the masseuses will get
(45%Maximum-24%minimum)+ Tip)
266934
Masseuses Revenues : 45% Maximum - 24% Minimum Share = 34.5% average
Each day use : 5 Staffs
Operation Time : 7 Days a week 10:00 am. - 09:00 pm.
Maximum Capacity (Thai Traditional Massage) :
(5*1(HR))*55= ($275 *9(Hr)/ day)*7= $17325* 4=$69300 / Months (Gross
sales/Maximum)
Revenues Share(Cost) : 69300*34.5% = $5977.13/ month
Cleaning & Washing Cost = ((35$+35$)*7)*4 = $1960/ Month
All the operational cost = 5977.13+1960+768 = 8705.13/month
Operational + Rental = 15705.13(Cost)
Overhead = (15705.13*12)/ 5(5 different services) = 37,692