Tea Firm Brews a Bigger Database

Celestial Seasonings Inc. will launch a package insert program next month as part of an effort to build upon its one-to-one marketing efforts that have been growing under the auspices of its newly formed Celestial Seasonings Direct division.

The Boulder, CO, maker of herbal teas – which for several years has done a limited amount of direct marketing through its catalog of teas, tea-related products, gifts and natural health items – is seeking to develop a deeper relationship with its customers while it extends its brand across a broader array of products.

The company expects to distribute 15 million package inserts into Celestial Seasonings’ products sold at retail outlets around the country during the coming year, offering its customers the opportunity to purchase its products through the mail.

Walt Freese, vice president and general manager of Celestial Seasonings Direct, said the inserts will serve as a vehicle to build its customer database and to develop a direct sales relationship with the people who drink its tea.

“That’s probably our first aim,” he said. “We’ll probably make a little bit of money on the inserts, not a lot, but it’s a good way to start to develop that one-to-one relationship with Celestial consumers.”

The first in the series of inserts offers a Celestial Seasonings gift collection, including teas, honeys, gift baskets, tea pots and other paraphernalia for tea drinkers. It includes a letter from Celestial Seasonings founder Mo Siegel urging customers to share the benefits of herbal teas with someone else. The inserts don’t include an order form but list a toll-free number – 1-800-2000-TEA – as well as the company’s Web site, www.celestialseasonings.com.

The insert itself, which Celestial Seasonings developed inhouse, is twice the size of a tea bag and is printed against an earth-toned background depicting images that evoke the company’s Rocky Mountain heritage. It folds out into a seven-panel minicatalog listing 11 products, each of which is pictured with a brief description. The company selected items for the insert that it had success with in the past.

“The wonderful thing about this type of prospecting is that the cost is very, very low and it couldn’t be any more targeted because they already are Celestial Seasonings users,” Freese said.

The typical Celestial Seasonings customer is female between the ages of 35 and 54 with a college education and a household income of $50,000. In addition, Celestial Seasonings customers tend to be focused on leading a healthy lifestyle.

The tea company has expanded its house file from 25,000 names when Freese joined the company last year to 50,000 names today, “and that’s with very little effort,” he said. “We’ve done a limited amount of prospecting.”

With the new effort, the company expects to expand the database significantly while it also explores the possibility of branching into new product categories and possibly conducting some direct mail campaigns.

“As we get better with database building and database collection, I’d like to see us get more into direct mail,” Freese said. “We’re making sure we have the direct model right before we expand it aggressively, so we’re testing on a small scale – and once we’ve done that, we’ll invest more aggressively against it.”

The company also is working with Abacus Direct, located in nearby Westminster, CO, to build its database.

Celestial’s direct division includes its e-commerce Web site and its retail division, which doubled in size last week with the opening of its second bricks-and-mortar store in the posh Denver suburb of Cherry Creek. The company also is working with Web marketing concern Rare Medium, New York, to beef up its Internet presence. Freese said the company is exploring the possibility of moving beyond a simple online catalog and offer a portal-type site related to “natural living.”

“We’re trying to build some more capabilities on the Web so we can become more interactive,” he said. “We’re not at the point yet where we have regular newsletters, but that’s where we want to go.”

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