How Not to Expand Your Delivery Area

Publish on: 11/22/2016

“Hindsight is 20/20.” That’s what I was telling myself after unsuccessfully trying to expand my party equipment rental business’ delivery area to too many new towns in one shot.

 

It seemed like an obviously bad idea after the fact. I stuck with it for one year (2015) before finally pulling the plug and shrinking our service area to just a little beyond what it was originally.

 

When expanding your delivery area, do it in a methodical, thought-out way, one step at a time. I learned this lesson the hard way.

 

You can’t effectively promote your business to all of those new towns at once to the degree you need to. (At least not without spending a lot of time and money, which I wasn’t prepared to do.) Which leads to deliveries spread out all over the place and no order density. You tie up a delivery crew on a single, out of the way, bounce house rental when they could have done multiple deliveries in less time. It just doesn't make sense.

 

As the business owner, you create self-inflicted stress. Now you have to worry about something going wrong in all these far flung locations. What if a blower stops working? What if a truck breaks down? It’s a lot easier to resolve and recover from these situations when you have order density. 

 

I don’t mean you have to keep your delivery area small. Just get a good amount of business flowing in one town before going after business in the next town over. It leads to more efficient delivery routes for your crews and more money for you. 

 

Having learned my lesson, here is the plan for the next time I decide to expand my delivery area.

 

STEP 1: Pick one or two towns (or zip codes) that are adjacent to each other and, of course, adjacent to my existing service area. Make sure the new area is large enough to make a difference. Large enough to get me excited about it and willing to sink some time and money (some, not a lot) into making it work.

 

STEP 2: Advertise to those zip codes through very targeted Facebook Ads and Google Adwords. You can get really specific with this type of advertising and only pay when a prospect clicks on your ads. You can also very easily waste money, especially with Adwords. The setup of these ads is the key for them to work. Google “how not to waste money on adwords” as a starting point.

 

I will choose NOT to do any print ads, such as direct mail or coupon mailers. I have a strong distaste for coupon mailers. I’ve used them before with little to moderate success. I know some rental companies may claim to crush it with coupon magazines. I just don’t see it in my market and I think I have given it a fair shot. I feel they wouldn't exist without the pushy sales people needed to sell them.

 

Side story about coupon mailers/magazines. I had a local competitor that I really only knew existed because he advertised in our local “Clipper” coupon magazine every month. I assumed the coupon magazine must be working for him if he kept on advertising. It was costing him at least $700 per month. And that is if he was only advertising in my “zone”, which he wasn’t, so I’m sure it was much more. The Clipper sales rep who handled his account called on me and I agreed to meet with her. In the sales call she talked about how well this competitor was doing because of his Clipper ads and implied he was one of the top rental businesses in the area. As I said, I really knew nothing about his company, so I took a look at his website. He had five inflatables! Now I’m thinking, how is he making any money. Nothing wrong with having five inflatables, but he was spending way too much on advertising for a business of that size. Sure enough, within a few months I received a phone call from him. He was looking to sell his equipment and shut down his business (I ended up buying a couple of the pieces). Moral of the story: just because a competitor is doing something, does not mean it is a smart thing to do.

 

STEP 3: Target the schools, religious organizations, townships, sports leagues, summer camps, etc. This is not a quick way to get business, but will give me more publicity and credibility in that new area when I start landing some of these public events. It can be time consuming as personalized emails seem to work best. That along with dropping names of other similar organizations that I’m already doing business with works like a charm.

 

Step 4: Rinse & repeat.

 

In conclusion, pick a couple of towns or zip codes to focus on that are adjacent to each other and to your current delivery area. Do not overreach. You can always add more areas later. You want laser focus on promoting your business in this new area and crush it before moving on. Good luck!

 

 

About the Author

Rob Wright is Founder & CEO of Bounce Rental Solutions and Co-Owner of Boing! Bounce Rentals

 

 

 

 

Comments

59942177 days ago
Teresa van Loey

Another informative post! Thanks for taking the time to write these. I just finished my second year in business and your blog has been very helpful.

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