Fairytale Brownies, Journeys Reveal Their Marketing Scorecards

In a revealing session at the NEMOA directXchange conference in Groton, Conn. yesterday, David Kravetz, co-founder of Fairytale Brownies, and Wade Lee Jones, director of direct mail and CRM at teen footwear and apparel retailer Journeys, discussed what marketing tactics and channels are driving positive results for their businesses — and which are not. Here's a recap:

Mailing catalogs is still working — and quite well — for both companies. In fact, both Fairytale Brownies and Journeys have increased their catalog circulation this year and are likely to do so next year as well. Journeys is currently seeing a 10 to one return on ad spend for its catalog mailings. Until that number drops, we'll be putting catalogs into the mail, said Jones. For Fairytale Brownies, mailing deeper into its buyer file (six years) via modeled lists has proven effective, as well as prospecting using names acquired from co-op databases.

On the flip side, social media isn't working for Fairytale Brownies or Journeys. To clarify, the channel isn't driving sales for either retailer. Both Kravetz and Jones were quick to point out that social media can be an effective branding and customer service tool, just not a sales driver — at least for their companies at this time.

Paid search is worth the investment for these brands. Fairytale Brownies is tracking improved conversion rates from modified broad match keywords (e.g., brownie delivery) and an extensive negative keyword list. Journeys has found success with refined paid search techniques such as geotargeting, which drives mobile users to its 1,200 brick-and-mortar locations across the country.

Affiliate marketing relationships with coupon sites hasn't proved fruitful for either Fairytale Brownies or Journeys — the margins are too low and the customers acquired via these sites don't come back to purchase again, Kravetz and Jones agreed — but select affiliate marketing with "mom and pop operations" has worked well for Journeys. Fairytale Brownies concentrates its affiliate program on loyalty programs, Kravetz said.

Fairytale Brownies relies on a decidedly old-school marketing tactic — outbound phone calls — to generate sales from its B-to-B customers, who account for roughly 60 percent of the company's total revenues. The retailers call customers at their place of business only and employ a soft-sell approach. We never call customers at home and we leave the aggressive selling to our corporate sales team, Kravetz noted.

At Journeys, better targeted emails have yielded higher conversion rates. The retailer segmented its subscriber list based on past purchase behavior, then personalized its messages to the different segments. Despite sending the same amount of email campaigns this year as it did last year, Journeys has realized a 40 percent increase on its return on ad spend for its email program, Jones said.

Going against the masses, both Fairytale Brownies and Journeys are moving away from free shipping. Fairytale Brownies will pull back on discounts and free shipping offers in 2013, and is transitioning away from a flat rate pricing model for shipping to tiered pricing. The company was losing out on too much money to its bottom line with a flat rate for shipping, Kravetz said. As for Journeys, the lift it's seen in conversion by offering free shipping hasn't made up for the loss it's given up in margin, Jones said.

In addition to limiting or eliminating free shipping in 2013, Fairytale Brownies plans to focus on the following areas: demographic targeting (middle to upper income women in their mid-30s to 50s, specifically) in its pay-per-click campaigns; A/B testing to optimize conversion on its website; expanding loyalty campaigns; making better use of personalization in all marketing channels; developing a mobile-optimized website; and getting a better understanding of its site visitors through web analytics.

For Journeys, using coupons as a data capture tool is and will remain a priority for the company. Other areas of focus will include driving more revenue from its digital catalog, which the company is committed to despite its lack of production so far, and behavioral retargeting via display ads.

We'll be testing new ideas, and return on ad spend will dictate our decisions, Jones said.