Sears and Holsted Marketing have seen response rates of 4 percent to 10 percent for two specialty programs aimed at generating new business in Canada.
Victor Benson, president of Holsted Marketing, New York, said the test campaigns, which mailed in July, as well as future ones will target people in the Sears billing file. Holsted creates the programs and product offerings, which are sponsored by Sears. The retailer receives a royalty on the net sales generated by its customers.
“The goal for Sears is to expand its product offering to its current billing file while generating an alternative stream of revenue through continuity programs,” Benson said. “This is our first venture into Canada, and our goal is to generate new business there.”
Sears' billing file in Canada totals well over 1 million.
The two plan to accomplish their goals by offering current Sears customers the chance to join specially created continuity programs. The first two tested in July were for jewelry and music boxes.
The July campaigns consisted of two mailings of 30,000 each targeting two different groups of people in the Sears billing file throughout Canada.
The recipient had the opportunity to sign up for the continuity program by mailing back the business reply envelope. The first offer in each of the test campaigns was a Wings of Love music box and a celestial ring for the jewelry program. Both items were offered for free. Once they join the program, they have the opportunity to preview other offers with no obligation to buy.
The jewelry mailing had a response rate in the area of 4 percent to 7 percent, while the music box offering generated a response rate of 5 percent to 10 percent.
Benson defined a response as someone reacting to the mailing via one of the options and signing up for the club.
Aside from the offer, he thinks the piece tested so well partly because Canadians receive less mail than U.S. residents.
“People in Canada are quite receptive to direct mailings,” he said. “They don't receive as many mailings like this as we do here in the U.S., so they are more willing to open it up and take a look at it.”
The two will drop 250,000 more of the jewelry mailings in late December, and in May they will send a mailing for the music box program to the same 250,000 people. Based on results of the test, no changes will be made to the mailings.
“We saw some very good results, so we don't see the need to make any changes to the packages for the official rollout,” he said.
Benson said he expects the rollout campaigns to cost more than $110,000 each.
Caroline Farnsworth, senior vice president of new business development at Holsted, said the results from the tests are consistent with what they see for their continuity marketing programs in the United States.
Hoping to expand even further in the country, Holsted is also working with department store chain Hudson's Bay. It also ran a test campaign with it back in August, which generated a response rate in the area of 5 percent to 10 percent. Farnsworth said the two will roll out a major mailing to Hudson's Bay database of customers in Canada in late December.
