Whiff of Added Income Sparks Cigars International's Insert Program
"The cigar market is such a niche market and is so tiny that with about five strong players in the market it's difficult to capture and keep customers," said John DeMarco, vice president at Cigars International, Bath, PA. "That's why I think you'll find that most cigar marketers do not make their lists available. It's just too much of a risk."
Still, Cigars International was interested in boosting its incremental income while also protecting its customer file.
"We felt it was an opportune time for us right now to generate some additional revenue and also provide an additional service for our customers," DeMarco said.
The firm teamed with list and insert media firm The Catamount Group upon the recommendation of its list broker, Direct Response Marketing Labs Inc., Dallas. After reviewing options with The Catamount Group, it was decided that Cigars International would offer a package insert program and a catalog blow-in program.
"Through the insert media programs, we don't have to expose our list, we can bring in some extra revenue and we can put some valuable offers in front of our customers," DeMarco said.
The package inserts will reach 250,000 buyers annually with more than 20,000 monthly shipments at a cost of $65/M. The catalog blow-ins will include about 3.2 million annual catalogs at a price of $35/M.
"We send out approximately 400,000 catalogs eight times a year to the house file and prospects," DeMarco said.
He noted that the blow-in program helps Cigars International offset the cost of catalog production.
The typical Cigars International customer is male, ages 35-55 with an average household income of $110,000 and an average order of $75.
DeMarco said the ideal participant for Cigars International's insert programs would be niche product marketers that complement the leisure market. Though he said his customers do look for bargains, they like to spend money on themselves.
"We are offering the market access to a male population of known direct responders with discretionary income that they are willing to spend on enjoying themselves," he said. "We're talking about someone who is going to spend 10 or more dollars for 20 minutes of enjoyment."
The package insert program begins in May, and several marketers already have placed test orders, said Amy Benicewicz, vice president of The Catamount Group, Bethel, CT. They include Sharper Image, Bose and BMG. Other mailers that are clearing offers include Bookspan, an Internet service provider, a publisher, a men's apparel cataloger and an insurance marketer.
The blow-in program is expected to start about the same time, though no clients are lined up yet.
"We feel it's perfect for reaching an upscale, well-educated, male audience," Benicewicz said. "It's a great opportunity for marketers because there aren't that many programs out there reaching that audience."
Meanwhile, Cigars International is looking for appropriate programs to test inserts of its own.
"We've earmarked a handful of programs that we are considering testing," DeMarco said. "We just want to find the best opportunities possible."