How do you get a business customer to open your catalog of promotional products? Include a free sample. Nelson Marketing, a $60 million Oshkosh, WI-based promotional products company, mails nearly 1 million product samples a year. Mailings with samples draw a 10%-20% greater response than catalog-only mailings.
Nelson, which does business under the 4imprint brand, mails 6.5 million catalogs a year, supplemented by 500,000 direct mail pieces for its custom products division, which sells promotional items emblazoned with company logos. The catalogs target primarily small and midsize businesses.
“One of the things we can’t do that most big distributors can is show up in someone’s office with a case full of sample products, because we don’t have any field sales people serving this market,” says Greg Iott, vice president of business development. But sending samples in the mail can be just as effective, particularly since “promotional products are kind of fun,” he adds. “You get a package like ours in the mail and you are going to open it.”
4imprint sends thousands of types of samples, Iott says, including pens, mouse pads, and travel cups – all imprinted or embossed with the 4imprint logo, phone number, and address. Ninety-five percent of the samples go to existing customers, rather than to prospects, based on recency/frequency/monetary (RFM) activity – particularly recent product ordering history, Iott says. By receiving sample items consistent with what they’ve bought in the recent past, customers are more likely to make a repeat purchase, he notes.
“If someone has bought pens from us in the past, we may have a special offer on a new pen,” Iott explains. “Or we might send a mouse pad to someone who’s bought computer accessories from us in the past.” Direct mail fliers, catalogs, and letters accompany most of the merchandise samples. The letters tout special offers available on the sample merchandise or other related items.
A pricey proposition Sending samples with mailings is not cheap, however. Whereas 4imprint spends 62 cents to produce and mail a typical 60-page catalog, it spends up to $3 for sample mailings. “But the return on investment for these packages justifies the added expense,” Iott says.
The samples come in several types of packages – cylinder boxes, small boxes, and large envelopes – all with the catalogs and direct mail pieces enclosed. The cataloger’s product vendors sometimes pay for the samples, though Iott won’t reveal specifics.
4imprint also mails samples to about 100 publications that cover some of the numerous industries that use 4imprint products, such as meeting planning, healthcare, banking, insurance, and real estate, Iott says. As with its customer file, building the media list “is very much standard industrial classification [SIC] code driven,” he says. “We’ve had pretty good success getting stories written on how to use our products, and that attracts attention from customers.”
In addition to improving sales and response, product samples can help generate brand awareness, says Trish Balmos, director of interactive marketing for The Sunflower Group, an Overland Park, KS-based sampling/promotions marketing company. “Sampling as a means of trial advertising is much more effective than any type of straight advertising,” she says. “We’ve found that it generates a much higher conversion rate because of the physical value of what’s sent out.”
Meet the new boss, same as the old boss. While that line comes from The Who song “Won’t Get Fooled Again,” it rings true for The Leather Factory’s recent acquisition of Tandy Leather.
“I’m ex-Tandy Leather,” says Wray Thompson, chairman/president/CEO of The Leather Factory, a Fort Worth, TX-based distributor of leather and leathercraft products, such as saddles, harnesses, and crafts kits. In fact, Thompson spent 22 years at Tandy, which sells leather crafts products such as purses, wallets, and belt kits, “and by the time I left, I was president of the company.” But upon company founder Charles Tandy’s death in November 1978 (Tandy also founded Radio Shack, which later become Tandy Corp.), Thompson says, he was let go. After his departure from Tandy, Thompson started The Leather Factory in 1980 with Ron Morgan – also ex-Tandy. And this past December, Thompson came full circle: The Leather Factory acquired Tandy Leather, a subsidiary of Tandycrafts, for $3 million.
“When I left Tandy, the company had 300 stores and more than $45 million in annual sales,” Thompson says. “Now Tandy Leather has just one store, in addition to dealers, and only $7 million in annual sales. It’s still profitable, but I think we can make it even more profitable.”
Tandy mails about 150,000 catalogs a year, 5% of which go to b-to-b customers. By comparison, The Leather Factory operates 28 stores, mails about 100,000 catalogs annually – about 96% to businesses – and has annual sales of about $30 million. Both companies operate e-commerce sites.
While The Leather Factory has no immediate plans to fold one catalog into the other, Thompson doesn’t rule out such a move. “We made the decision before we bought Tandy to try to operate the businesses separately for a year until we can figure out what we should do,” he says. “If we can clean up Tandy’s lists and bolster Tandy’s response, we may never put them together.”
That’s not to say that the company won’t mix the mailing lists. Thompson believes The Leather Factory might be able to use some of the names from Tandy’s lists. “We’re going to try to work in Tandy’s mailing list with ours, and we may mail some tests,” Thompson says.
Overall, Thompson says, Tandy’s best asset is its brand: “There is still a loyal customer base for Tandy Leather products,” he says. “The company has been around since 1919, which is one of the reasons why we’ll continue to publish the Tandy catalog under its own name.” Of course, it should come as no surprise that Thompson believes in the Tandy brand. After all, he was once – and is again – the company president.
Business-to-business promotional products cataloger 4imprint announced on Jan. 2 that it acquired Adventures in Advertising Franchise (AIA), a Boston-based promotional products distributor, for nearly $12.8 million in cash. AIA sells promotional products through 400 franchised distributors in the U.S. and another 600 associates internationally. “Our backgrounds have many complementary strengths,” 4imprint president/CEO Dick Nelson said in a statement. “The alliance will allow us to serve all our customers more efficiently, customizing our services according to their needs.”