SURE, BLOGS, E-MAIL and search are great. But for continuity card publisher IMP, nothing beats the tactile appeal of good old-fashioned direct mail.
“Our marketing is based on sampling,” says Jan Dvořák, COO of International Masters Publishers Inc., the North American arm of global continuity marketer IMP Group. “We give our product to the customers free, because when they start to use it, they must have it. It's an expensive [approach], but it's a unique concept, and key to good response rates.”
But despite current mailbox success IMP faces an ever-shrinking continuity market and a dwindling universe of prospects to mail. Several factors are in play, says Dvořák, including the Internet's growth; continuities no longer being a hot, new concept; and increased pressure from brick-and-mortar stores.
“[We face] bigger competition from traditional retail shops,” he says. “And people want to have the freedom to buy what they want at any particular moment.”
Changing consumer behavior indeed has affected companies in this space, agrees Karen Isenberg, senior vice president for strategic marketing at Specialists Marketing Services, which manages IMP's mailing list, as well as several other club/continuity files.
“But clubs and continuities like IMP, BMG/Columbia House and Scholastic at Home are still among the top 10% of direct mailers,” she says.
IMP operates some 20 properties in the United States, ranging from recipe clubs like Grandma's Kitchen and Easy to Bake, Easy to Make, primarily targeting women, to animal trading card offerings like Weird n' Wild Creatures that appeal to children. The company, which does business in 30 countries, has about 1 million members in the United States, 2 million in Europe, and another 400,000 in Australia and Asia.
IMP's main product lines are very traditional card continuity programs, with new cards sent every three weeks. Most products present one topic (like an animal or recipe) on each card, which members then store in binders or boxes for future reference.
Over the years, the demographic makeup of the customer base — predominantly women in their late 20s to mid-50s — has stayed the same. “Our customers are normal, ordinary people who want to get inspiration and better knowledge on certain topics,” says Dvořák, noting that the appeal of some programs dictates their audiences. “Clearly, cookbooks are bought more by women and encyclopedias about aircraft by men.”
A new program for scrapbook enthusiasts, Fun With Photos, Memories and More, is attracting a slightly higher income customer, due to the relatively high price points associated with this hobby, he notes. Price points for most of IMP's programs are low, typically ranging from $6 to $9 for each of the card shipments.
The biggest product in the United States now is Grandma's Kitchen, Dvořák says, citing an interest in the nostalgic, warm family feeling generated by those recipes. Conversely, this type of product doesn't do as well in Europe, where they're more interested in lighter cooking. The most successful program across the pond right now is Classic Composers, a CD/book offering that profiles different composers and their music each month.
IMP also is finding success with DVD/book series such as Natural Killers, which focuses on predatory animals like lions, tigers and sharks. That club is doing well in Europe.
Direct mail accounts for about 90% of the marketing dollars spent by IMP in the United States, while insert marketing factors prominently in the European strategy. Efforts in Western Europe heavily mirror those undertaken here. Eastern Europe represents the greatest area of potential growth for IMP, as the competition from other publishers isn't as strong.
The company mails about 30 million pieces a year. While Dvořák wouldn't reveal exact response rates, he would say that they tend to vary from 2% to 5%, depending on the product and how aggressive a mailing strategy is taken.
In addition to crippling rising postal costs — “If increases continue with this speed, it could kill the business,” warns Dvořák — continuity marketers like IMP face the challenge of a shrinking direct mail universe that doesn't perform the way it once did. Modeling and co-op databases are being used, but the volume of viable prospect addresses that once was available just doesn't exist anymore.
Because card marketers like IMP rely so heavily on direct mail to get samples into customers' hands, newer and more non-traditional channels like DRTV and the Web aren't as effective. But, says Dvořák, problems arise when more and more of IMP's key data sources use an expanded channel mix.
“Internet-generated names don't [do] as well as direct mail-generated names and some of IMP's key data sources have more than 40% of their customers generated through the Internet,” he says.
In the past, card marketers like IMP found success with sweeps-style mailings, says the Specialists' Isenberg. The sample cards, low price points and the packages' promotional nature lent itself to sweeps, but that avenue no longer is an option.
But the real crux of the problem, she feels, is that because continuity mailers like IMP are in the mail so frequently, they're hurt by the declining availability of new hotline names. “That directly [affects] them,” Isenberg says. “They constantly have to acquire new members.”
A typical mailing piece for IMP is Weird n' Wild Creatures, which gives prospects a sampling of about 10 “creature cards,” plus an assortment of baseball card-size trading cards that rank “monsters” like the Loch Ness Monster and the velociraptor on their attack and defense mechanisms on a scale of 1 to 10. A letter and brochure offering a “clip n' go” radio/watch/compass gadget premium rounds out the package.
The Natural Killers mailing gives prospects a full-length DVD on swamp tigers, along with an accompanying book. Grandma's Kitchen gives recipients samples of 14 different classic recipes, like herb-roasted chicken, Black Forest cake, Sunday pot roast and green bean casserole.
Dvořák admits that IMP still hasn't realized the Internet's potential for its products. “We try and try, spending a lot of money, but it just doesn't work,” he says, adding that the company hopes to begin developing new products catering to an online audience. “The reason is that our customers must see, feel and touch our products.”
The Web is great for a club/continuity marketer like IMP in that it allows people to do things like manage their accounts, make payments online and learn more about the product. But the downside, says Dvořák, is the wealth of choice — and thus competition — available.
“There's a lot of free information people can find on the Internet,” he says. “People can download millions of recipes for free. The Internet is educating people that information should be free, and that's a challenge for anyone who sells information.”
For the future, IMP is looking to strengthen its brand presence with consumers.
“In the past we sold our products under product names,” Dvořák says, adding that when customers rang up the call center, they were greeted with “Great American Recipes” or “Wildlife Explorer,” and not IMP. “As we want to [do more cross selling], it's important for us to build up the trustworthiness of the IMP brand.”
Dvořák, a native of Prague, Czech Republic, has been with IMP for more than 10 years, forming the company's branch there in 1994. That same year, he co-founded the Admaz, the Czech and Slovakian equivalent of the Direct MarketingAssociation.
IMP was founded in 1972 by Swedish entrepreneur Alf T÷nnesson with the “My Great Recipes” recipe card program. Still privately held, the company began operating in the United States about 20 years ago.
