Using Alternative Media to Build a List

The genesis of a catalog can follow several creative paths. Some catalogs begin as concepts, springing forth full-grown from an entrepreneur’s forehead. Some spin off from retail stores or other catalogs. Others grow organically, often from space ads or a single product offering.

Design Toscano took the last approach. For founder Michael Stopka, “alternative media” isn’t really alternative at all; it’s part of a core strategy for finding prospects for a niche market and converting them into loyal buyers.

Since placing its first space ad in 1990, Design Toscano has grown its revenues to $25 million per year, its house file of buyers to 380,000 and its total inquiry list to 1.3 million. Stopka expects to mail 12 million catalogs in 1999.

Placing Space

Michael Stopka began the catalog, which specializes in garden statuary and European reproductions, with his wife Marilyn while he was finishing up a graduate degree in management information systems in the early 1990s.

“I started basically as a hobby,” he says. “I would go to Europe every year, and I saw that there was a market among Americans for European reproductions.”

A friend of his owned a statuary company, and Stopka began marketing his statues in the backs of magazines and newspapers: Metropolitan Home, House Beautiful, The Wall Street Journal, The New Yorker, Traditional Home. He requested $5 per catalog from inquirers, mostly because he was using his friend’s 40-page wholesale catalog rewrapped with his cover at the hefty cost of $3 each.

At first, the company sold all different types of statues, but it became evident that certain product categories—medieval gargoyles, Victorian angels and classical reproductions—made up the bulk of the business.

“In 1993 I hired an agency to put together a catalog that was directed toward the hotter areas,” says Stopka. “We had our first offset job with a print quantity around 300,000.”

At that time, through the help of Charles F. Beardsley Advertising, an Avon, CT, agency that specializes in space-advertising, creative and media-buying, Design Toscano had built its inquiry list to 300,000 names generated entirely from space advertising.

“At the time our merchandise was pretty one-dimensional, as far as statuary can be,” says Stopka. “I knew I had to diversify really quickly. Even though gargoyles were a hot product in the mid ‘90s, that was only going to last a year or two.”

Design Toscano kept to Stopka’s original theme of historical European reproductions and introduced other products that had a European theme, including tapestries, furniture, jewelry and garden statues. While Stopka was involved with circulation and modeling, he put most of his efforts into finding unique products and building a house list.

“The key things catalogs must have are good merchandise and the right customers,” says Stopka. “You can always find people to run the back end—the phone centers, shipping, accounting. They’re all important parts of the business, but if you don’t have sales, you don’t have anything. A lot of times, catalogers forget that. They forget that it’s the merchandise that people are buying. If you don’t keep the merchandise fresh, and you don’t keep to the mission statement, you’re in trouble.”

Re-contacting Prospects

Once Design Toscano had a reasonably priced catalog, the company was finally able to profitably re-contact inquiries and to prospect through list rentals.

Nancy Beardsley, a partner in Charles F. Beardsley, explains, “What’s important for someone using space for the first time is to know that when you get inquiries from the space ads, you own those names. With a list, you rent it and use it once. For space to work, you need to have a strategy for re-contacting people and converting as many as you can.”

For Stopka, that strategy involved scoring the inquiries through Abacus to score them for mail-order propensity.

“Abacus, in my opinion, is the next step after space ads for niche marketers,” he says. “They were able to find other niches and good universes for us.”

With a total of 1.3 million inquiries, Stopka says, “At this point, it would be very difficult to mail a name from 1991, 1992, 1993 without the scoring. Let’s say there’s 150,000 names from 1990 to 1992. With Abacus scores, you identify the top 20 percent. I can mail those names three times a year and still make money using a discount strategy.”

Testing Creative

Although Design Toscano has expanded its universe and product offerings to the point that list rentals are effective, the company still relies on space ads and other alternative media for much of its prospecting efforts.

Now that the catalog company is better established, choosing creative and ad placement is a matter of testing.

“There are certain things that direct response ads have to do,” says Nancy Beardsley. “These are rules that can be broken, like all rules, but when you start, it’s best to follow them.”

She says that when some catalogers start running space ads, they look at companies like L.L. Bean, which has been well branded after years of advertising and mailing, or like Pottery Barn, which has a chain of stores to support the advertising.

“Those companies can use a single image because they don’t have to tell the whole story anymore,” she says. “I think that some people new to advertising think that they’re better known than they are and that that approach will work for them.”

A better approach, she says, is a good headline, a call to action and an image that is indicative of what kind of catalog you’re sending.

For example, one of Design Toscano’s current ads features a pair of candlesticks shaped like Chinese acrobats and a BRC with the tagline, “The Catalog for Your Adventurous Side.”

While it’s important to test placement, Beardsley believes creative tests are overrated. “People think that creative wears out faster than it does,” she says. “Sometimes clients think, ‘Oh, there are 100,000 people reading House Beautiful and I ran that ad in November. If I run it again in February, they will have seen it already and remember it.’ They don’t.”

Design Toscano runs ads for a year or a year and half with good results.

What Products to Feature

Two of the biggest decisions in creative are which product to feature and which offer to make.

Lois Geller, a partner with New York-based catalog and marketing consultancy Mason & Geller, says, “An exclusive product is always a good idea, but most catalogs don’t have them. They have me-too products. In that case, a best-selling product is the best choice.”

Michael Stopka says that 90 percent of his products are exclusive, from which he and Beardsley select representative best sellers to test in advertising.

“It’s very hard to pick the one product that’s going to sell,” says Beardsley. “If you pick a product just because it’s a best seller, it doesn’t necessarily make for a good catalog-request pull. As you look through the catalog, there’s a certain cadence to the book and the way that products play off each other, and that price point sits against this one on a page, and if you take a product out of context, often it loses everything.”

While Design Toscano tests different products to show, the offer is always a straight free-catalog request, not a direct-sales offer that markets the featured product “off the page.”

Why? Beardsley says that customers who buy off the page are difficult to convert into profitable multi-buyers for catalogs with higher average order values.

She explains, “You end up bringing in a customer at a lower price point. If you have an average order of $150, and you try to bring in new customers with a $15 clock, then what do you do with them?”

Lois Geller elaborates, “For a vitamin product, you can sell off the page with a loss leader, but for an apparel or home product, you have to use regular price because space ads are also branding. If you’re Haband, you can sell off the page at a discount, but if you’re Neiman Marcus, you probably can’t.”

Testing Media Buys

Choosing the right media is at least as important to the success of a space ad as developing the right creative.

Says Beardsley, “If you put the ad into House Beautiful instead of Women’s Day, you qualify it through the readers of the publication.”

From the very beginning, Stopka and Beardsley chose higher-income-demographic publications, which worked well throughout the transition from a niche cataloger to a general-interest one. The company, however, continues to test.

“In the case of Design Toscano, we look at which media are strong for this particular category right now,” says Nancy Beardsley. “Those things change—what’s good this year is not necessarily good next year.”

She says that the magazine’s circulation and kind of editorial are not as important as its response component: “In Mike’s case, when he started, he had a hot product in the gargoyles. But if we had to choose between a good shelter title that draws strong response or a magazine that happens to be about gargoyles, we would have opted for the first one.”

Aside from testing to optimize media buys, Design Toscano is testing ad formats.

“Basically, what you’re looking for is the cheapest way you can get the most out of it,” Beardsley says. “With Toscano, we started with little fractional ads and then we moved up and tested third-pages. Now he uses some pages and BRCs, which is even more aggressive.”

In addition to space ads, Design Toscano does some package inserts and is exploring card decks for the gardening market. In general, however, space ads for a higher demographic are more successful.

“Go where your target audience will be,” says Lois Geller. “If your target audience is going to open Val-Pak, that’s a place you might want to consider. Free catalogs in a co-op mailing usually do OK if you’re hitting the right target market.”

In addition to high-end apparel and home decor catalogs including Garnet Hill and Ballard Designs, Beardsley’s agency works with catalogs that target moderate-income demographics and have a lower average order value. For these companies, free-standing inserts and co-ops are more effective, both for the demographic they reach and the lower cost.

“We work with Paula Young Wigs,” she says. “There we’d look for age qualification and geographical consideration, and other formats work. Although they have a healthy cost-per-order, we’re trying to keep costs down.”

Timing Orders Right

Because alternative media such as space ads turns catalog buying into a two-step process, timing the ads right becomes essential—especially for a catalog like Design Toscano that has two seasons: the outdoor garden season and the gift-giving season.

Michael Stopka says that the garden statuary sells well through September, then dies in October. The version of the catalog sent out after October includes more home-decor items with lower price points for holiday gift-giving. Thus, he has to be sure that his space ads are timed so each prospect gets the right product mix.

“In January and February we want to go out with the gardening products, emphasizing garden statuary and fountains—the kinds of things you’d find in a European villa,” says Stopka.

Beardsley and Stopka place the ads in qualified magazines—Horticulture, Fine Gardening, Gardening Design—then when the leads come in early in the garden season, Design Toscano can hit them up to four times during peak gardening season.

“Into fall, you can combine them with Abacus to find the best names that you can bridge into the gift season,” says Stopka. “You start to cycle over and over.”

Explains Stopka, “Space names shouldn’t be looked at as a one- or two-time contact. It’s really an asset that develops over time as long as you have a re-contact strategy.”