Tough Choices Pay for Tender Heart

Tighter targeting of prospects and existing customers helped Tender Heart Treasures improve response rates and control rising postage costs for its summer 2002 catalog.

“We have been burdened with consistent, significant increases from the USPS to mail catalogs,” said Lisa Kuehl, advertising manager at Tender Heart Treasures, Omaha, NE. “This has hurt our ability to prospect more aggressively and mail deeper into our house file. Each year, we need to be more cautious regarding which customers we mail to and how many times we contact them. And as our costs have increased, some of the borderline list segments have been eliminated from last year's mix.”

The house file response rate was 2.6 percent for the summer, up from 2.1 percent the prior summer. Prospecting produced a 2 percent response, up from last summer's 1.5 percent. Both figures exceeded expectations for the country giftwear and home decor catalog.

“Both improvements are primarily due to the lower circulation, which resulted from improved list selection as well as a change in targeting our house file,” Kuehl said. “Most of the decrease in circulation resulted from a drop in mailing to prospects combined with a slight drop in mailing to the house file.

“From our house file we cut out lower performers from our summer mailing plan. People who haven't responded in the last 18 months or more were eliminated. Generally on the prospecting side, we have had the most success utilizing mail-order buyer files of other catalogers that target women. Home decor and gift books have generally provided the best results. We have also had some success utilizing cooperative database models, apparel lists and niche subscription files for prospecting.”

Kuehl would not provide numbers on how many summer catalogs were sent.

Offering free shipping to selected customers on orders of $50 or $75 or more also boosted performance.

“We used this to target different segments of our target audience, and it has to do with the history of customers who have shown a propensity to buy more with that incentive,” Kuehl said. “A control group with no free shipping offer does less on the response rate and less on the average dollars per order.”

The summer catalog dropped in April, May and June. Page count stayed at last year's 60. The average price of items in the summer book remained at $12. The target audience is primarily female, split mainly into mothers in their 30s and 40s and women in their 50s and 60s. The average household income is $40,000 to $60,000.

Tender Heart Treasures also produces catalogs in the spring and fall. Total annual circulation for 2002 is projected around 14 million.

The average order amount for the summer catalog was $50 while it produced just over four items per order. Both statistics were consistent with the prior summer.

Though orders can be placed via telephone, mail and fax, no online option is available.

“We have been developing an e-commerce site in conjunction with a complete change to our core business systems, so it has taken a little longer than expected to offer our customer the ability to order online,” Kuehl said. “We expect a full promotion of our e-commerce site starting in early 2003 along with the ability to carry out e-mail promotions.”

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