From 2008 to 2014 it seemed customers were running in and throwing money at gun dealers clamoring for almost any gun they could get their hands on. My FFL dealer noted in 2010, “We do not need a marketing plan; we need a ‘now serving, take-a-ticket’ system.” But those boom-sales days are behind us. Professionally, I am IBM’s Chief Marketing Strategy Advisor and was asked by Tactical Retailer to offer some industry marketing best practices for the small retailer. Regardless of business size, from “Mom & Pop” shops to Fortune 50 corporations, there are a host of basic, easy and simple marketing strategies that can have a huge impact on revenue.
Competition Is Up, Sales Are Down & So Are Margins
According to 2016 statistics published by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), there was a huge 40 percent growth of FFL licensees from 2000 to 2014. Manufacturers and distributors packed inventory into dealers as the market slipped to keep up their earnings. As invoices started to come due for dealers, most had a cash flow issue, panicked and offered super low prices to turn products into cash, which eroded already low margins for everyone. Suddenly, a market including 40 percent more competition are all now fighting for sales with smaller margins — a huge problem. There is light at the end of this tunnel, if you stop selling like it is 2008.
With more competition, dealers must now concentrate on proven marketing concepts and programs to attract and retain customers through the next few election cycles. These programs require only a very small capital outlay, but they have all shown to deliver a very high return on investment even during market downturns.
Establish A Customer Marketing Database – $0-100 Yearly
Database marketing can be one of the most cost effective and highest ROI marketing tools available that can be used for both direct/postal mail and email. The first step is to start capturing names, email addresses, addresses and potentially a phone number — whatever a customer will provide on a form, take it. Offer an in-store drawing entry or add a simple “Sign up for our Newsletter” online form to your website. Either can easily deliver hundreds of customers a week into a customer marketing database. Use an old computer or iPad as a kiosk for in-store customers to use the same online form to subscribe themselves to your mailing list. The cost of setting up a simple online form or Excel spreadsheet-based database could cost nothing or be a nominal fee from your website hosting provider. Of note, businesses that are sold/acquired having an active customer mailing list are usually valued significantly higher than those business that have no idea who their customers are.
Email & Direct Mail Marketing Programs — Email $300-900 Yearly, Direct Mail $500-$2,000 Yearly
Now that you have a marketing list, you can upload it to companies such as MailChimp or Constant Contact for email, and/or postcard print and mail servicers such as GrowMail, Amplified Mail, PFL and others, all of which handle the majority of the work for you.
The email vendors will provide a simple interface to manage your list, an editor to design the emails, will send the email on your behalf, provide an easy mailing list sign-up button from your site and even track and record legal opt-out/unsubscribe requirements. Most of these services are less than $75 a month for lists smaller than 10,000 subscribers from Constant Contact. MailChimp offers a free limited service for less than 2,000 subscribers to get started. Industry marketing best practices recommend not sending more than two to three emails per month, however I recommend once monthly emails with well-planned content, specials and coupons. This format could include what’s new, special sale items, overstock, new accessories, sponsored events and coupons for certain items or manufacturer rebates. Consider supplementing your email program with a customer wish list so when a shipment of a certain ammo comes in, you can make the call and turn the inventory quickly.
Despite email being at the forefront of marketing, direct USPS mail is actually still a far more effective marketing tool because now most of us receive little mail and we tend to actually look at it now. Most companies find that a once a month simple “Special Offer” or “What’s New” postcard can really drive significant traffic. Companies such as PFL will find customers in your area who are good targets based off of keywords such as hunting, shooting, firearms, and then send a one-time postcard or mailer on your behalf. Once the customer is in your store, it is up to you to entice them to subscribe to your other marketing programs.
Web, Social Media And Digital Advertising
If your dealership does not have a simple website or at least Instagram or Facebook account, you are missing a huge opportunity to connect with customers. Customers now expect any legitimate business to have a website. It costs $5 to $10 per month for a simple website from GoDaddy or another provider, and is a requirement for business branding.
Snapping and uploading a few pictures of new merchandise to your website, email newsletter or social media accounts can generate a lot of in-store traffic just to fondle the new products. Just as you need to build a marketing database, you will need to promote getting customers to follow and “like” the dealer’s social media sites. A business social media profile should stand on its own and should never be related in any way to a personal social media account; studies have shown personal connected accounts almost always negatively impact a business’s social media brand.
We are in a digital age, but business cards remain one of the least expensive marketing tools available. These little cards from companies such as VistaPrint get picked up, carried, circulated by friends, thrown in purses, wallets and drawers and on average are looked at an amazing ten times before being thrown away. Do not forget to include your website, phone numbers, email address and social media site information on the card. Heavy, thick, color paper cards deliver the most impact and are retained the longest by customers. Usually several thousand full color thick stock business cards can be purchased for less than $100.
Target Female Shooters
The typical demographic of new shooters is changing with a surge from the female demographic. Women usually prefer well-lit, spotless stores and sales associates lacking the “Alpha Male” demeanor. Female shooters have shown to not be as price conscious and more focused on support and training. Dealers who have done well with female shooters also offer training courses, on-site ranges, are actively involved in sponsoring female-only based shooting groups and are far beyond just the mindset of selling pink guns to girls.
Offer Low-Cost FFL Transfers
Over the years, we have seen many FFL dealers become irritated with being the online auction transfer dealer without customers buying those same products stocked in their store. The usual reaction is to increase FFL transfer fees to a unpalatable level, but this is the wrong approach. With the obvious point that firearms are often the lowest margin products in a gun store, dealers should celebrate these customer visits. Dealers can see what a customer is purchasing and usually the price. Maybe in-store pricing is just a few dollars off to keep the customer buying in-store. I have yet to do a FFL transfer through a dealer and not walk out with other additional purchases. Keep the FFL transfer fees low, this will keep customers coming into your store, buying other items in the process, and if you can get them added to your marketing programs, you may just be able to convert them to a long-term customer.
Apply For Your SOT License To Sell Suppressors And Short Barreled Rifles
This is a typical product expansion strategy in marketing. The suppressor, short barreled rifle and NFA-regulated firearms market is still hot, retains a higher margin and the sales process can really help build a deeper customer relationship due to the longer sales cycle. Suppressor manufacturers have noted that if the Hearing Protection Act passes, dealers with SOT licensing will likely be the only dealers able to get inventory during the initial first few years of the suppressor sales surge. A $500 SOT license may be well worth the investment.
Stock A Wide Selection Of AR-15 Parts And Accessories
The most fun part about AR-15s for most customers is the customization. Stock a wide range of Mil-Spec, standard upgraded parts and also various anodized colored parts. Once a customer has built just one AR-15, you know that there is always that one part he or she needs and having a local source with a wide breadth of parts can really make a customer’s day.
Offer Professional Gunsmithing And Cerakote Services
With all the customization of firearms going on now, gunsmithing services and Cerakoting services have become a growing business. Most stores find that they can easily employ a part-time gunsmith just with walk-in business to handle barrel swaps, accessory additions or even professionally add a set of sling swivels to an expensive firearm.
The marketing creativity around Cerakote services has been fascinating. Dealers are now not only just offering high margin Cerakote services, but using it to differentiate, move old stock and add margin to their firearms versus the stock versions. I have also seen dealers offer discounted custom Cerakote services as an incentive to move old stock or used firearms, which can still preserve margins, keep a customer happy, all while turning inventory. These in-store services guarantee customers have to be in your store at least twice for drop-off and pick-up.
Get Started Now
As you can see, many of these are very inexpensive efforts to get customers back into your store. The key with marketing is not waiting until it is really slow to get started.