Hello Direct: Focus on Creative & Print Production

Mention the name Hello Direct, and undoubtedly almost everyone will say the same thing: “Oh yes, the headset company.” Like Harley-Davidson and motorcycles, Hello Direct usually is top of mind when it comes to telephone headsets.

How the company nurtures and maintains “ownership” of that product is instructive for other catalogers looking to dominate their own categories. Hello Direct executives use a combination of strategies, not the least of which are exceptional creative and print production capabilities that help the company stay connected with its customers.

Then and Now

Founded in 1987, the company’s original mission was to eliminate distributors from the sales process and bring telecommunications solutions directly to end users. In 2000, publicly traded Hello Direct was sold to GN Netcom, another telecom headset manufacturer. GN Netcom, in turn, is owned by Great Nordic, a large multinational corporation whose shares are traded on the Copenhagen Stock Exchange.

Bob Faville, Hello Direct’s director of direct marketing, says the acquisition brought numerous benefits to the U.S.-based catalog. “The synergies and economies of scale we get are very helpful on a day-to-day basis,” he says. “We now have the financial backing to do some of the things we’ve always wanted to do in terms of product and category expansion. Before the acquisition, we had trouble balancing investment spending versus delivering against analytical expectations every quarter.

“They saw a lot of good value in us, too,” Faville continues. “GN didn’t have any direct access to the end-user office market, so we’re bringing that to their organization.”

Undoubtedly, another selling point was Hello Direct’s creative talent. Greg Burke, creative director, oversees the company’s catalog and Web site design, copywriting, and print production. Burke and his team excel at numerous aspects of catalog creative, including: concise, benefits-oriented copy; uncluttered, contemporary page designs; and catalog versioning projects that boost response levels, sales and the product “wow” factor.

Creative Solutions

In addition to its trademark headsets, Hello Direct also sells other telecommunications gear such as teleconferencing equipment, telephones, recorders, two-way radios and mobile accessories. The target demographic includes businesspeople in phone-intensive, small- to medium-sized companies—that is, people who depend on their phones to help them conduct business.

To sell their products, Hello Direct’s copywriters could resort to simply listing product features, cramming onto the page the myriad technical considerations for each product. But that would be too easy.

More difficult is how Hello Direct does it: including just enough technical data to answer customers’ questions, and then interspersing product benefits for the user. Moreover, the designers are careful not to overcrowd each page with technical jargon and unnecessary copy.

This type of page layout demonstrates a keen understanding of the customer’s needs and desires. As you can see from this example (right) from a recent catalog, the overall effect is a page that’s easy for customers to quickly navigate and has the information they need, while still including visually appealing elements such as screened boxes, artwork and color.

Value of Partnerships

While Burke and his team design the pages and write the copy, accurate color reproduction is left to the company’s strategic partners: Quad/Graphics for pre-media services, and R.R. Donnelley for printing.

“Part of this process is having Quad do product photography for us,” says Burke. “This way, they have the products right there, so they see what colors they need to match. Also, we expect our vendors to make accurate judgement calls on the right tones for product colors, and how to best represent those tones on the paper we use and in relation to other products pictured in the same pages.”

Burke saves his in-house staff primarily for true creative work. “I can’t have my team fixated on being tool wizards or creating new production systems. The technology has to be seamless and efficient. We put the onus of technology support onto our print partners.”

That said, Burke’s is no technology-shy creative department. Up-to-date technical capabilities such as digital proofing and computer-to-plate printing have enabled Hello Direct to stay at the leading edge of catalog production. But one printing capability in particular has enabled the catalog to rise above the pack and connect with its customers in a uniquely personal way.

Versioned Catalogs

Each quarter, Hello Direct gravure prints a new 48-page catalog body at R.R. Donnelley’s Lynchburg, VA, plant. Then each month, a different 12-page cover wrap, offset-printed at Donnelley’s Glasgow, KY, plant, is bound onto the catalog bodies and mailed. Housefile customers are mailed 12 times per year, each time getting a different cover wrap and its accompanying offers and promotions. Meanwhile, prospects are mailed once per quarter.

Here’s where the versioning comes in. Product selections on the cover wraps change depending on the recipient segment. For example, during this past second quarter, cordless-headset buyers on the catalog’s housefile got a catalog depicting an updated, light-weight cordless headset and featuring the cover copy “Cordless Grows Up.”

Non-headset buyers were encouraged to “Save Your Neck!” and directed, via product benefits, to specific headsets featured within the catalog.

Finally, customers who previously bought a corded headset got a cover touting the benefits of upgrading to a higher-end headset and were offered a $50 rebate on any corded system.

Think this was a lot of work and expense for no great sales benefit? Think again. According to Faville, from this particular campaign, the company saw an 88-percent greater response rate from corded headset buyers vs. non-headset buyers. And contribution per thousand from corded headset buyers was 332 percent higher. Also, cordless buyers’ response rates were up 248 percent, and contribution per thousand was an amazing 465 percent greater than non-headset buyers.

Says Faville: “The results are largely attributable to housefile segmentation. These cover versions were sent to a very targeted set of customers. People who already own headsets don’t have to be educated on the value of these products. They already are believers and either buy a new one for themselves, or their colleagues, or they’ll pass the catalog along to someone else with a recommendation to buy.”

In this way, the cataloger can target promotions to specific segments, depending on purchase history. That is, they can deliver the right message to the right person at the right time.

Burke notes that team members from creative, sales, product marketing and other departments decide what offers to make to which customer segments and when. Often, they’ll test offers and promotions to see what pulls the best responses from which segments.

The Ink-jet Project

Next quarter, Hello Direct will begin using yet another technological innovation to help personalize catalogs even more. With the help of its partners at R.R. Donnelley, the cataloger will start ink-jetting personalized messages not only on catalog covers, but also on individual pages.

For example, if a customer bought a headset, his next catalog might come with an ink-jetted message on the cover stating: “John Smith, you’ve bought a corded headset in the past. Check out page 7 for special offers to go with your new headset.”

When the customer turns to page 7, he sees yet another personalized message stating: “Mr. Smith, buy this product today, and get $30 off.”

Product offers and promotions can be tested this way, says Burke. “For example, we can offer a free gift or price discount to those who buy a headset. We’ll then see which offer will boost response the best.” A control group would receive a generic offer to help discern true response rates.

Faville notes that customer profile information on Hello Direct’s housefile will come in handy for future ink-jet projects. “We’ll be able to target not only those who’ve made specific purchases in the past, but also target vertical markets within our housefile, such as medical personnel, consultants, lawyers, etc.—that is, customers within certain SIC codes. So we’ll be able to ink-jet very targeted messages to customers in those professions.”

Burke says the ink-jet messages—inserted when the books are on Donnelley’s bindery line at the Lynchburg plant—can be placed at various points in the catalogs, including the front and back covers, between the cover wraps and the catalog bodies, and in the middle spread.

The result, undoubtedly, will be greater one-to-one marketing, enabling Hello Direct to connect that much more effectively with its valued customers.

About Hello Direct
Headquarters: San Jose, CA
Primary product line: Telecommunications equipment and headsets
Average order size: Inbound and Web sales: $300; corporate accounts: $450
Revenue breakdown: Inbound catalog sales: 40 percent; e-commerce sales: 15 percent; outbound telemarketing to corporate accounts:
45 percent
Number of employees: 190
Number of catalogs mailed:
22 million in 2002
Number of SKUs: 850

Catalog Buyers
Size of Hello Direct’s master file: 686,761 business buyers
Cost to rent: $100/M
Customer demographics: 55 percent are male; 90 percent are regular PC users; 80 percent are regular Internet users; and 70 percent use cell phones.
List manager: Merit Direct, (203) 541-2331

Opt-in E-mail Buyers
Size of file: 600,000
Cost to rent: $325/M
List manager: Walter Karl, (845) 620-0700
Blow-in and package-insert programs also are available. Contact Jody Smith at Walter Karl.