HATTIE: Marketing adviser, John Wargo, gives us a way to get our message to customers for just cents. Richard and Joe are really good marketers. They run ads consistently in the newspaper because they have to compete with the other movie theater in town. They have say, `Well, these are the movies that are showing.' But what could they do that wouldn't cost then an arm and a leg to get more people in the door?

JOHN WARGO (Marketing Consultant): Well, I think the combination of advertising--you're going to use newspapers, you're going to get a broad circulation on the newspaper. They could supplement that by doing geographical targeting, and by that I mean--what they can do is draw a line around their movie theater, draw a line around the retail establishments. They can go to a letter shop and what they can do is they can get all of the addresses, all of the carrier routes within a three mile radius, a five mile radius. Whatever they have found is their market, they can now supplement their newspaper advertising with a direct mail program. And the combination of the two will really work well for them.

HATTIE: OK, now I don't have to know everyone's name?

JOHN: Right. No, you really don't have to know anybody's name because there's an industry out there that has addresses. Now what you can do--you can be very, very creative with the name.

HATTIE: What do you mean?

JOHN: Well, you can call it `Movie Lovers'. You can address it... HATTIE: You mean, address it, `Movie Lovers'? JOHN: Right.

HATTIE: Don't say `John Wargo' or `Hattie Bryant'. Say, `Movie Lovers'?

JOHN: Right. Right. You can say, `Movie Lovers'. You can put whatever you want to put in there. You might want to test a couple of mailings to see which one draws best. The important thing is that when you go to the letter shop, you get the correct address.

HATTIE: OK. Now what do I need to give them in this piece of mail? Do I need to give them free popcorn, a discount? That's where the offer comes in, right? JOHN: Right. The offer--free always works. I mean if you're...

HATTIE: Free always works. JOHN: It always works. I mean, if you put in the mailing `Free Popcorn', you do two things: one, you're going to draw traffic, but second of all, you can can measure your response rates.

HATTIE: All right.

JOHN: It gives you a clear idea of how well that mailing worked. Then the next time you do a mailing, code it differently or give something else free and see which one pulls. And then you begin to see what really attracts this audience, what bonus works the best for me.

HATTIE: So you're saying one week give free popcorn, the next week discount for kids under 13.

JOHN: Could be.

HATTIE: The next week, free Coke...

JOHN: Yeah. Right.

HATTIE: ...and then see what works.

JOHN: Make it exciting and then see which one works the best.

HATTIE: OK. Now my only drawback, for me, on this occupant saturation mail is someone might look at it and, `Oh, it's junk mail.'

JOHN: There's no such thing as junk mail. Mail is valuable to the reader if the message is relevant as long as the message is relevant.

HATTIE: So if I love popcorn, this is gold.

JOHN: You've got two things. If you love movies and you love popcorn. So it's not just one offering. So it is gold.

HATTIE: OK. Richard and Joe started a new business after cashing out of other ventures. If you've cashed out and are now bored, click on Step 1 and get going again. Everyone at SMALL BUSINESS SCHOOL hopes you'll never retire. We hope you'll keep finding new ways to contribute. How can we get better if the wisest among us are at the golf course? We'll see you next week.