Not even the most experienced direct marketers could have predicted the events of September 2001 and the impact their aftermath would have on the industry.
With — to understate the matter wildly — a less than typical period to benchmark against, DMers approaching fall 2002 would have every right to proceed with caution. DIRECT talked to several marketers and industry pros to get their take on how the fourth quarter of 2001 turned out and what we’ll see this season.
“It’s not quite ‘full steam ahead,’ but notwithstanding the turbulent economy, people feel that they can’t not market,” says Michael Brown, an Austin, TX-based business-to-business telemarketing consultant.
Now is not the time for timidity, concurs Don Libey, president of investment banking firm Libey-Concordia. He says he’s seen an upswing in both circulation and prospecting, and decisions by more than a dozen CEOs of catalog companies to emphasize the positive aspects of business.
“9/11 is like any other day in the early fall — which is a very, very important period to be in the mail,” adds Ralph Drybrough, CEO of MeritDirect. “No one is out there trying to avoid it.”
Because of the outpouring of generosity to groups like the Red Cross, numerous nonprofits were hit hard in the months following September 2001. Kim Noltemy, director of sales and marketing for the Boston Symphony Orchestra, says the BSO lost about $500,000 last fall in corporate funding, primarily due to money being diverted to relief charities. But the BSO has been pretty successful in making up those contributions, she says.
The Boston Pops holiday campaign was in production on Sept. 11, 2001, and the BSO decided to let it mail as planned. “I was scared to death, as you can imagine,” says Noltemy. But — most likely because the Pops’ holiday performances are a traditional, happy experience for many New England families — the mailing actually performed a few percentage points ahead of the previous year. The 2002 Holiday Pops mailing will drop in early September as usual.
But this fall will be difficult for the organization to benchmark, especially on the BSO side. While overall ticket sales did pick up about three weeks after 9/11, sales for the BSO’s fall 2001 opening night were “stopped dead in its tracks,” much because a big print advertising push would have been in poor taste, says Noltemy. (For more on the BSO, see page 45.)
Last year, the Chicago Botanic Garden conducted its first fall direct mail test to see if new members could be encouraged to join outside of the popular spring time frame. Unfortunately, the 75,000-piece test went out right after Labor Day and just before the terrorist attacks, says Jennifer Black, membership manager for the Glencoe, IL nonprofit. Although it wasn’t the expected 1% return, response was strong for the first three or four days, with about 500 responses received overall.
Another test will be conducted this fall. But Black says the message is being carefully considered since the package would drop close to the anniversary of Sept. 11. “There’s a strong sense that it can’t be the typical sales piece, that it will have to have a deep, evocative message,” perhaps that solace could be found in the refuge of the Garden, she adds.
“9/11 really had no effect by itself in altering mailing plans,” says Max Hart, assistant to the executive director for direct response fundraising at the Disabled American Veterans. He blamed the combination of 9/11, the anthrax scare and general softness in the economy for lowering the organization’s revenue from $105 million in 2000 — its best year ever — to about $98 million last year.
Last September, the Cincinnati charity mailed out a 2 million-name acquisition drop, using first class postage. That lifted response over the September 2000 mailing a whopping 60%. But, since postal rates went up this year, the DAV can’t afford to go first class in fall 2002. Instead, it will increase its first week of September acquisition mailing to 3 million pieces, hoping for a higher response thanks to the increased swath the mailing will cut.
Cataloger Lands’ End isn’t worried about benchmarking against last year for the fourth quarter of 2002. There was a dip in customer traffic during the week following Sept. 11, and there was a resulting dropoff during the third quarter, recalls Andrea Stevenson, spokeswoman for the Dodgeville, WI catalog. But on the balance sheet, there was nothing specific that showed Sept. 11 affected Lands’ End’s business.
Plus, the direct retailer’s 2001 fourth quarter was strong. Net income for that quarter was $45.9 million — a 44% increase over $31.8 million net income for the fourth quarter of 2000. “We’ll look at the entirety of the fourth quarter to benchmark for this quarter,” Stevenson says.
None of the company’s catalogs are mailing near the anniversary date. Back-to-school books were in homes in July and August; the fall kids and fall core catalog will hit Sept. 3; and the holiday book drops in October.
Smithsonian debated the issue of 9/11 and decided on a patriotic theme for the cover of the 1.9 million catalogs it sent as its first major holiday mailing. The catalogs — one of six total holiday mailings — were planned to be in homes the latter part of the week of Sept. 11 and into the next week.
“Theoretically, by the time customers receive our catalog the events will have already taken place,” said Susie Boghosian, director of marketing and strategic planning for Smithsonian Catalog in Washington.
An American flag provides the backdrop for the cover with the “First Ladies Eagle Pin” in the foreground. There is no specific reference to Sept. 11 on most of the books, but a reference to the significance of the day is conveyed. “It is who we are,” Boghosian said. “We are America’s museum.”
Some business-to-business mailers have fared surprisingly well over the past year. Post-9/11 increased military spending — as well as non-9/11-related healthcare market spending — actually led Wyncote, PA-based ATD-American to mail about 18% more and get an overall 20% increase in business. The cataloger — whose products range from office furniture to custodial supplies and to food service items — mails more than 5 million catalogs per year, says executive vice president Arnold Zaslow.
Bob Blumberg, president of legal supplies cataloger Blumberg Excelsior, also reports good results.
At press time, the firm — which had to close its only retail outlet last year, a 115-year-old store about 10 blocks from the World Trade Center — was planning to mail about 125,000 catalogs on Sept. 2, to be followed by another similarly sized drop in October. The company’s main book goes out three times a year for a total of about 750,000 pieces. Average response rate is 1.5%.
Since the closing of the retail store, more and more of the company’s business moved to its Web site (www.blumberg.com). This April, the company debuted a print catalog for lawyers in the New York/New Jersey area who are involved in intellectual property matters.
For Business Week magazine, too, fortunes have improved since last September, according to worldwide circulation vice president Tom Masterson.
“We’re actually mailing more this year than last,” he says. Specifically, the New York publication is sending out approximately 13 million yearly prospect mailings in the United States. That’s about 8% more than last year.
While the magazine is doing some benchmarking from last September, it’s mostly monitoring sequential quarter-to-quarter trends with its direct mail, notes Masterson. During the week of Sept 11, 2001 Business Week had sent out a 2 million-piece mailing, received no responses for a week and was “very concerned,” recalls Masterson. But that mailing actually performed well in time and helped lead to the magazine’s success of late. He attributes this performance to “a good news environment” sparked by the current wave of alleged corporate skullduggery and accounting fraud.
For publisher Rodale Inc. of Emmaus, PA, September typically is a strong month. But the company is taking the events of last fall into consideration.
“This year, out of respect for the remembrance of the 9/11 tragedy, we have taken steps to avoid dropping any direct mail campaigns on that date,” says Gregg Michaelson, Rodale’s vice president for direct response book marketing.
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