The Power of Inserts

Package inserts, catalog blow-ins, ride-alongs and statement stuffers — these are just a few of the ways catalogers are generating additional revenue.

By creating profit centers through various insert media, catalogers are taking advantage of the current climate in which every dollar counts. They’re creating larger pools of opportunities for themselves, in addition to instituting programs that benefit their insert advertisers.

The usual published rates for a cataloger’s package-insert program range from $50 to $60/M, while catalog blow-ins generally are priced from $25 to $35/M. There are about 1,200 insert programs on the market, of which more than 400 are catalog-related.

What to Consider

Insert program owners, including catalogers, look for offers that will be value-added for their customers, because accepting inserts in outbound packages is an implied endorsement of the offer being made. Ideally, offers should target the primary demographics of your audience.

For instance, an offer for a garden tiller may be appropriate if your catalog reaches known homeowners. Or if your primary demographic consists of a mature audience, inserts from book clubs featuring audio or large-print books may be welcomed by your customers.

Of course, you wouldn’t want to accept inserts for competitive offers to your merchandise lineup or offers of questionable taste. If you’re uncomfortable with the insert offer, pass on it. Your goals are to sell your product first and to maintain long-term customer satisfaction and loyalty.

What You Bring to the Table

To an insert mailer, your catalog offers the following: a positive selling environment, guaranteed visibility, category exclusivity, relatively low cost and the ability to supplement the sale/lead flow between direct mail campaigns. In turn, by accepting inserts, you’ll forge relationships with advertisers and perhaps establish a reciprocal arrangement that allows you to promote your offer to the mailer’s customers.

You also can take advantage of other marketers’ insert programs to prospect for new customers for your catalog. Insert advertising can generate inquiries and orders, and it may drive traffic to your Web site. Yet many of today’s catalogers prospect simply by renting customer lists. Unfortunately, the cost of renting names, creating a direct mail piece and paying for postage may be four times the cost of creating and placing inserts. Therefore, now may be a good time to test prospecting via inserts.

How the Process Works

The insertion process takes place in your catalog company’s distribution center (DC). Or you can contract a letter shop to receive, collate and then deliver the collated inserts to the DC. Carefully tracking the insert from delivery to distribution offers critical information such as placement results, and allows the mailer to read and record the results for each insert program.

The DC’s cooperation is a key part of any insert program’s success. DC personnel are responsible for putting the inserts into outgoing packages or insert vehicles. Many catalogers collate a group of inserts either into an envelope or nest them into product flyers, mini catalogs or full product catalogs (see examples on this page).

The responsibility for controlling the program is on the insert-program owner from the moment he or she accepts delivery of the inserts. Then it’s up to the insert owner to verify the quantity, check key codes and distribute the inserts according to the order.

Logging the status of an insertion job and reporting the progress to the insert manager is the next step. The manager in turn keeps the broker and mailer informed. This allows the mailer to track responses at the appropriate time.

Problems/Solutions

While no cataloger can guarantee timely insertion, it’s important to communicate the progress of the insert job at each juncture. This allows mailers to track results correctly. A mailer should be notified if a delay in distribution occurs.

Recently, a program owner was waiting for merchandise to fulfill orders when the West Coast dock workers went on strike. The merchandise literally was sitting on a ship at sea until the strike was resolved. This caused a delay of several weeks in fulfilling orders to customers, and in turn delayed the expected time frame the inserts were to be included with shipments.

Another company filed for bankruptcy, and all outbound shipments abruptly stopped. What happened to the inserts? Some were stacked on the insertion line, while recent deliveries sat unopened and undelivered. It took a quick-thinking manager and broker to salvage what they could for the mailer by having the inserts picked up and delivered to another insertion program.

But the most common problem is simply a change in the projected number of shipments. There are either too many inserts left to place within a given timeframe or not enough. Both scenarios impact the mailer, who can avoid a negative outcome by creating a generic and undated offer.

For the most part, catalog-insertion programs flow glitch-free and provide successful results for the insert mailer. There’s been steady growth in the number of new insert programs available as more companies discover this win/win method of increasing revenue. The same holds for the number of mailers adding the insert medium to their advertising mix. The key to success stems from proactive action from the insert manager and broker as they become part of the program’s winning team.

Debra Goldstein is vice president, management, for LH Management Division of Leon Henry Inc., Scarsdale, NY. You can contact her at debrag@leonhenryinc.com or call (914) 723-3176, ext. 26.