The Vermont Teddy Bear Co., Shelburne, VT, increased circulation by almost 20 percent on its latest catalog mailing, which dropped last month to 475,000 of its best customers and prospects.
“We’ve had an increased demand for books and a better response rate,” said Arthur Borden, direct mail manager at Vermont Teddy Bear. “That indicates to me that I can go deeper into my list. Last year, the demand for the book was high enough that I could increase circulation and still maintain the level of profitability that I like to do.”
The 19-year-old company, which sells many versions of one core product – a 15-inch handcrafted teddy bear – has been tweaking its product line, adding holiday-specific and themed teddy bears as gifts through its Bear Gram gift delivery service. The bears are marketed over the radio and through direct mail, with radio ads generating the lion’s share of revenues. In fact, its direct response radio ad budget has increased significantly – expanding to 45 markets and 197 stations during the 1999 holiday season, compared with 29 markets and 131 stations in 1998.
E-commerce has become an integral part of the mix as well, with 35 percent of overall December orders placed through the online channel. And its business-to-business division posted the most rapid sales growth across sales increases in all lines of business for the second quarter ending Dec. 31. Revenues overall increased 50 percent to $4.8 million for the second quarter over the same period the previous year.
Magazine advertising works hand-in-hand with the catalog effort, Borden said, noting that ads tested in the December issues performed well; new commitments to one-third page ads in the February issues of Esquire, Hemispheres and Playboy and a small 2 1/2 column-inch ad in this week’s issue of The New Yorker will run promoting Valentine’s Day, the mail-order company’s busiest holiday.
“The week before Valentine’s Day, everyone in the company stops what they’re doing and takes orders,” Borden said.
Catalogs are created and produced inhouse, except for pre-press, printing and mailing. Spencer Press, Wells, ME, handles printing. Three catalogs are traditionally mailed each year – coinciding with Valentine’s Day, Mother’s Day and Christmas – and all mailings will see increased circulation this year.
Although Vermont Teddy Bear primarily mails to its inhouse list of 1.4 million names, it does some prospecting of lists, including cooperative databases. Experian handles its list management. Borden said he recently switched from the Abacus Alliance to Experian’s cooperative database, Z-24, and he’s pleased with the results.
“I have used Abacus and dropped it because it wasn’t working,” he said, estimating the prospect list via Z-24 for this year’s mailings at 50,000 to 70,000 names.
Other changes this year include a change from glossy paper to matte. Trim size and number of pages will remain constant, and approximately the same number of SKUs, or items, will run per book. A new creative director was hired last month to streamline the catalog’s look.
“We’ve been at work on simplifying what we do in order to reduce distractions and to put the products front and center so people can get the biggest exposure that we can offer and still keep things interesting,” Borden said.