Natural Foods Merchandiser

Direct Marketing: Don't Make it Junk

There's much to be said for taking the direct approach to marketing, talking firsthand to naturals and organics consumers about the benefits of products and services. But before you open your mouth to chat up those discriminating, well-educated and well-heeled consumers, make sure you have something worthwhile to say.

That's the seemingly simple advice of marketing experts, who agree that direct-marketing campaigns, including direct mail, newsletters, in-store fliers, and Web-based, opt-in e-newsletters and e-coupons can pay off in a big way—as long as they're done right.

"Direct mail has to add value," says Martin R. Baird, president of Phoenix, Ariz.-based Nutritional Marketing. "Value can be done through a coupon, in dollars and cents. But even better, it can be done by educating people about new products and technology, about things they are doing that can be detrimental to their health."

Reaching Out Through Others
Maxine Wolf knows about packaging information to natural products consumers. As vice president for Mambo Sprouts Marketing, her job is to help retailers and manufacturers reach out directly to consumers through the co-op marketing program her Haddonfield, N.J., company has built. During the past seven years, the company has developed a highly targeted mailing list that includes more than 385,000 consumers in nine markets: Boston; Washington, D.C.; Chicago; Denver/Boulder; Los Angeles; New York; Philadelphia; Seattle and San Francisco.

Those consumers have several things in common. They shop at naturals/organics stores at least once a month, spending nearly half of their $132 weekly grocery expenditures on health and natural products. They are active participants in healthy living, with 72 percent saying they manage their health through their food choices. They are computer savvy and direct-mail responsive, with 83 percent saying that coupons help influence their natural products purchases. And they are well-educated, with 75 percent having an advanced degree.

Through trial and error, Mambo Sprouts has learned what motivates those consumers. "Even more important than their income, [it] is their education that determines who they are," Wolf says. "They want product information. They want to know who makes the products, they want to know about the stores that sell them, they want to know which causes the retailers and manufacturers support."

To appease that appetite for information, Mambo Sprouts reaches out to its consumer base five times per year with a mailer that includes a Mambo-generated coupon book featuring special deals and values from retailers and manufacturers. Wolf says the mailer also includes a colorful, informative and user-friendly newsletter, offering recipes, health tips and other practical information to health-conscious consumers. In addition to its mailings, the company distributes more than 3.2 million copies of its coupon books and newsletters each year through more than 400 retail stores, including specialty retailers such as Whole Foods and mass-market supermarket chains.

The success of the program, Wolf says, can be measured in the coupon redemption rate, which ranges from 0.5 percent to 29 percent depending on the offer, and the high number of repeat manufacturers and retailers included in the mailers.

"The downside of direct mail is that it's very costly. You have to create the list, yet finding the right customers can be expensive. Then you have to pay for postage and design and produce the materials," Wolf says. "Because we're a co-op vehicle, the costs are shared, so it becomes a very cost-efficient way to reach that highly targeted consumer."

Partnering With Vendors
Some manufacturers consider the expense of direct-marketing programs worthwhile. And the good news is that all these manufacturers are eager to share their direct-marketing material with retailers.

"For some reason, many smaller retailers kind of get trapped in the Hercules thing —they have to carry the whole world on their backs," says Baird. "Instead, they should be a sponge so they can pick up on the work that manufacturers have already done. In many cases, there is good material that can be reused with minor tweaking. You don't have to spend the time and money developing materials yourselves, and besides, manufacturers have deeper budgets and more resources at their disposal than most retailers."

Stonyfield Farm Inc., for instance, reaches out to consumers through direct mail and e-coupons. It now has more than 300,000 subscribers who have opted in via Stonyfield's Web site to receive e-mails full of recipes, health tips and environmental news.

Earthbound Farms' two opt-in newsletters have been steadily gaining in popularity and now boast more than 12,000 subscribers, says Peggy Miars, consumer marketing manager.

Because Seventh Generation began life 10 years ago as a catalog company, direct mail is part "of our DNA," says Karen Fleming, senior vice president of marketing. Its customer database is updated whenever customers interact with the company—whether they call, sign up for e-coupons or e-newsletters on its Web site, or fill in its shopper cards. The data are then used to maintain an interactive relationship with the customer. "By telling us a little bit about themselves and what they're interested in, we have the ability to customize the content we send so we can highlight those interests, whether it's the environment or animal rights or health," Fleming says.

The success of its marketing efforts is continually measured. Redemption of e-coupons downloaded from its Web site, for instance, averages more than 40 percent. Seventh Generation continually works with retailers who distribute its newsletters and coupons to see what generates the most response among consumers.

Seventh Generation attributes its direct-marketing success to the fact that it opens the door to consumers by giving them the choice to participate. "What we're doing is giving people the opportunity to be in contact with us as opposed to being in their face," says Fleming, noting the company also has a strict privacy policy that assures consumers their data are not being shared.

Going It Alone
Retailers who decide to build their own direct-marketing programs might want to borrow a page from Trader Joe's of Monrovia, Calif. Since 1967, the popular retailer has reached out to its loyal customer base with a no-frills newsletter—starting with a double-sided, 8.5- by 14-inch page with single-spaced text, before moving to the current Fearless Flyer "booklet" format it adopted in 1986. What both versions of the newsletters share is a sparse design.

"We're cheap. I don't think that's a secret to our customers, and we think they appreciate that," says Pat St. John, spokeswoman for the privately held retailer, which distributes the flier in its stores and mails it to customers about three times per year. "We don't spend a lot of money on fixturing and signage in our stores or on lots of marketing and advertising. Again, we think our customers appreciate that we give them information that is useful and entertaining but that is straightforward, without any ads."

Baird also credits Trader Joe's "folksy charm" for the success of its flier. "It's different. They tell a story. They're not just talking about jumbo shrimp for $4.99 per pound. They talk about how some guy went to the North Atlantic and at 12:02 caught the shrimp and had it hermetically sealed so it could be brought fresh to you. The story adds value."

It's those kinds of stories retailers should think about sharing. "I don't think many nutritional retailers realize how much they downplay what they know. They assume—incorrectly—that everyone knows what they know," Baird says. "Direct mail gives them a good place to write a story out, make it educational and valuable, and make it different."

Where to start? Baird says among the key rules is to remember that features tell, but benefits sell. "Features say what a product is, what's in it. But benefits tell consumers what it will do for them—how it will make them feel better or live longer. That's what they want to hear."

Connie Guglielmo is a freelance writer, editor and novelist in Los Gatos, Calif. Reach her at [email protected].

Natural Foods Merchandiser volume XXIV/number 9/p. 50, 52

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