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Haverhills Invests in Prospecting

Though sales from a first-time prospecting campaign by a direct marketer of hi-tech electronic products were small, the company considers the effort a necessary investment in the future.

“Last year we mailed to just the house list. But you've got to grow the company,” said Paul Harris, CEO of Triad Marketing Inc., Edina, MN, which produces the Haverhills catalog. “That was the motivation behind it.”

The winter 2002/spring 2003 Haverhills book mailed to 40,000 prospects along with 160,000 house file names. Catalog circulation was 140,000 a year ago, all of which were house file names. The house file grew to 160,000 this year, mostly from extensive advertising.

The house names are on track to produce about a 2 percent response rate, which is in line with expectations. The prospecting is tracking toward 1 percent. Harris said he had no projection for the prospecting response rate before the effort began.

“We're still working on what went wrong,” he said. “Maybe [the prospects were] just not familiar with the Haverhills format and product. Roughly 85 percent of our products are exclusive to us. They may be similar to other products offered by other marketers, but ours are unique.”

The prospects were obtained from the lists of Brookstone, Clever Gear, Preferred Living and TechnoScout, about 10,000 from each. The Brookstone and TechnoScout names are underperforming versus those from Clever Gear and Preferred Living.

“Like everybody else, I wasn't expecting to be blown away by the numbers, given the economy,” he said.

But Harris isn't about to give up on prospecting, or even some of the sources used in the current effort. He plans to roll out a summer/fall book in April.

“Obviously, we will go to more of a house list,” he said. “For the April catalog, we will do a 90-10 split favoring the house file. We will probably use lists again from Clever Gear and Preferred Living but not Brookstone and TechnoScout.”

On target with expectations has been the book's average order of $105, about the same as a year ago. Harris attributed this to a pair of cover offers that have “withstood the test of time”:

· A “special deal” in which purchasers can buy any three items on pages 3 through 6 and get the cheapest one free.

· A 3-in-1 Soft Light, batteries included, will be sent to those with purchases of $110 or more.

“With this catalog I went to six products per page on pages 3 through 6 instead of four,” he said. “I felt my house list had seen many of the products and they didn't need as much text since they are familiar with them. This meant I could add products to the inner pages.

“And with the 3-in-1 Soft Light, even if they return the products they buy, they can keep that as a free gift.”

The eight-page format limits the catalog's per-piece expense to about 44 cents, of which 23 cents is spent on postage. The book offers 38 items, including four that appear on the order form.

Harris said 85 percent of customers are men about 55 or older. Buyers' average household income is $65,000-plus.

“We get a lot of check orders,” he said. “The older audience likes to write them out, and even type a one-page letter telling us who they are and what they're up to. They're from the era when writing letters was the common thing to do. About 15 percent of catalog orders are checks sent in with the order form. About 75 percent of orders are phoned in. About 1 percent is generated by fax, and the other 9 percent are Web orders coming in through www.haverhills.com.

“It was only 5 percent coming in a year ago on the Web,” he said. “[That channel] has progressed very nicely for us, and it will continue to grow as our customers become more familiar and more comfortable with it.”

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