920 89 141 Hallmark[1]

MARKETING THE TRADITION

4/26/08

WHO YOU’LL MEET TODAY

Chris Madden Chief Marketing Officer

Bob Feeney VP, Group Management Supervisor

Liz Poole VP, Creative Director

Wendy Arnon SVP, Associate Media Director

WHAT WE’LL TALK ABOUT TODAY

Direct Marketing & KOCC

Situation/Business Challenge

KOCC Goals

Accomplishing Our Goals

Other Considerations

DEFINE DIRECT MARKETING

Most common definition:

Advertising that generates an immediate, measurable response

DEFINE DIRECT MARKETING

Most common definition:

Advertising that generates an immediate, measurable response

New world, new meaning:

Marketing communications designed to directly increase brand profitability

DEFINE DIRECT MARKETING

Three ways Direct Marketing can help:• Acquisition

– Begin new-customer relationships with your brand using methods that best balance effectiveness with efficiency

DEFINE DIRECT MARKETING

Three ways Direct Marketing can help:• Acquisition

• Optimization– Help those customers find the most profitable relationship with your

brand

DEFINE DIRECT MARKETING

Three ways Direct Marketing can help:• Acquisition

• Optimization

• Retention– Provide reasons, in proportion to customer value, to maintain that

relationship with your brand

DEFINE DIRECT MARKETING

We call this: Lifetime Value Optimization

“Acquire with intent to keep.Retain with intent to profit.”

SITUATION

Hallmark• Hallmark Keepsake Ornaments (HKO) helped create the

collectible-ornament category over 25 years ago

• HKO started the Keepsake Ornament Collectors Club (KOCC) 15 years ago and it has grown to over 166,000 members

SITUATION

Consumers• Consumer interest in collecting has also been growing, especially

in the ornament category, during the past five years

• However, sales growth in non-traditional collecting has outpaced growth in traditional collectibles categories

• Many ornament collectors are not aware of the HKO brand and do not shop by brand (for ornaments) in any event

KOCC BUSINESS CHALLENGE

The Challenge for Hallmark Keepsake Ornaments

• Maintain dominant share of market

• Increase brand recognition and significance

• Support category (collectible-ornament) growth

WHAT WE WANT TO ACCOMPLISH

KOCC Goals for 2009

• Increase sales of Keepsake Ornaments by 10%

• Increase KOCC membership to 200,000

• Bring new customers into the ornament category

HOW TO GET THERE - StrategiesIncrease Sales• Acquire new KOCC members

• Build retail store traffic

• Increase incidental sale

Increase Membership• Reduce attrition among current club members

Add new consumers to the category• Extend the reach of HKO communications

• Increase importance of the HKO brand

INCREASE SALES -Acquire New Members

Targeted Direct Mail• Begin with current customer base

–Automatically migrate GCC “ornament fanatics” into KOCC

–Stand-alone upgrade mail to GCC ornament buyers

–Member-Get-Member to targeted segments

• Extend reach to outside lists

–Test targeted lists

INCREASE SALES -Acquire New Members

Holiday Gold Crown Catalog• Increase presence with mini-Dreambook bind-in

• Infuse with new KOCC brand message

Strike while the iron is hot• Insert applications in HKO packaging

• Send bounce-back coupons to new GCC members who purchase ornaments

INCREASE SALES - Build Store Traffic

Develop special drive-to-retail offers, e.g.:• Free gift wrap with holiday purchase

• Free shipping of Keepsake Ornament gifts

• Special invitation to Debut

INCREASE SALES - Build Store Traffic

Make stores an option for immediate consumer fulfillment• Test media to drive prospects to retail for Dreambook

• Test targeted mail with option driving prospects to retail for “instant membership” (with instant ornament fulfillment)

INCREASE SALES - Increase Incidental Sales

Maximize use of retail environment• Ceiling hangers/posters

• Special ornament-debut end-caps

• Integrate take-one display more prominently in all HKO areas

INCREASE MEMBERSHIP - Reduce Member Attrition

Test automatic renewals• Automatically renew and bill credit card from initial membership

• Eliminate Dreambook renewal form

Communicate more effectively with the base• Use database to identify “at risk” members

• Test effectiveness/efficiency of contact strategy

INCREASE MEMBERSHIP - Reduce Member Attrition

Provide members with new club benefits and reasons to stay and to purchase; e.g.:• Reward longevity via discount on renewals (specials at 1 year, 5

years, 10 years)– GCC bonus points for renewal

– Extra month free for every year of membership

ADD NEW CUSTOMERS - Extend Our Reach

Grow the KOCC base, and the category, by testing mass media vehicles

• Expand into life-stage targeting

• Use multi-media approach

ADD NEW CUSTOMERS -Build the Brand

Make it impossible to miss the Keepsake Ornament Brand and the Collector’s Club

• Increase emphasis at all touchpoints–mail–catalogs–in-store

• Insure consistency in all communications–look–style

CREATIVE

Branding

Creative Strategy

Examples

CREATIVE - Branding

• Branding goes beyond the qualities & properties of the actual product. It is the sum total of every:– experience

– memory and association

– emotion

– opinion, anecdote, rumor

– expectation

• To be successful, every brand must:– have a personality: the more distinct, the better

– differentiate: the benefits, how it is delivered

CREATIVE - Branding

• Consumers own the brand– we can influence attitudes, expectations

– we must respect consumer perceptions as we create,enhance or evolve the brand

• Strong Brands make good business sense– give consumers permission to buy more, try new products, recommend

to others

• Campaigns change - Brands remain

CREATIVE - Strategy

• Target Audience– Primary: Married women/Moms

- with children up to 12- $50m HHI

Grandparents

– Secondary: Anyone looking for a tangible way to preserve family memories

• Consumer Insight– Ornaments are “happiness in a box”.

CREATIVE - Strategy

• Positioning– Keepsake Ornaments is the way to elevate family events into lasting

memories.

 • Key Benefit

– With Keepsake Ornaments, and especially Keepsake Ornament Collector’s Club, you have the opportunity to get involved with unique and fun ornaments that you, your family and friends will cherish and enjoy today, and for years to come.

• Creative Examples

MEDIA

Media Approach

Vehicles

Measurement

MEDIA OVERVIEW – Objectives

• Generate qualified leads and new members for the KOCC

• Increase brand awareness of Keepsake Ornaments

• Grow ornament buyer base

• Capitalize on theme collectors

• Establish response benchmarks for each media vehicle

MEDIA OVERVIEW – Strategies

• Use multi-media approach to generate members, brand awareness and retail sales

• Use a combination of targeted and mass reach vehicles

• Test life-stage appropriate themes

• Capitalize on theme collections

• Test product specific themes (Barbie/Peanuts/Star Trek)

TARGET TREE

GCC Ornament Fanatics

GCC Preferred Status

New Moms

Women with Children

Collectors

Grandparents

New MoversNewlyweds

Direct MailMagazines

E- MailInternet

MEDIA VEHICLES

CONSUMER MAGAZINES

Media Channel Rationale Strategy

PrintMagazines

•Traditionally responsive, provides quality leads

•Same reach as general awareness

•Use as a mass medium as well as targeted

•Target by editorial and demographic skews

•Test a combination of:•mass pubs with low cpm•traditionally responsive pubs

• Parenting• Womens• New Moms• Theme-specific(e.g.Disney)

•Unit: 4c page w/BRC

•Test in 1Q/2Q; Roll-out in 3Q

•Negotiate value-add

CHANNEL SPECIFICS

DIRECT MAIL OUTSIDE LISTS

Grandparents

Newlyweds

Collectibles

Women with Children

New Moms

TargetedList

Audience

Theme Specific

New Movers

Media Channel Rationale Strategy

Direct Mail

•Highly targeted to key segments

•Generates high response

•High-impact creative units break through clutter

•Offers tremendous testing opportunities with large roll-out potential

•Test a variety of lists late 1Q/early 2Q:• soccer moms • new moms• new movers• newlyweds• collectors and “interest in collecting”• grandparents• children’s merchandise buyers (e.g. Lillys Kids)• theme-specific

•Results to determine list expansion in Q3/Q4

CHANNEL SPECIFICS

CASE - U.S. MINT CENTENNIAL OLYMPIC COMMEMORATIVE COIN PROGRAM CASE STUDY

Identification of Key Prospects• The U.S. Mint maintains a house list of previous Mint customers

who are numismatic enthusiasts.

• Grey Direct played a major role in the creation of this list through years of outside list and print acquisition for numerous U.S. Mint programs.

CASE - U.S. MINT CENTENNIAL OLYMPIC COMMEMORATIVE COIN PROGRAM CASE STUDY

Identification of Key Prospects• Supplemental lists were used to broaden the customer base for the

Olympic coins, and continue to populate the housefile with “enthusiasts” for future campaigns.– Coin Collectors– General Collectors– Sports Collectible Masterfile– Olympics/Related Event Interest– Local Subscriber Files (Atlanta)– Sports Subscriber Files

The above lists were selected to augment the collector house files and provide new names of interest specific prospects.

CASE - U.S. MINT CENTENNIAL OLYMPIC COMMEMORATIVE COIN PROGRAM CASE STUDY

Evaluation/Results• Grey Direct’s efforts accounted for more than half of the 2.4

million coins sold.

• In addition to driving sales of the Olympic Coins, direct response significantly augmented the Mints’ house file, expanding the number of qualified prospects for future mailing.

INTERNET SITES

Media Channel Rationale Strategy

Internet

•Drive qualified traffic to site

•High reach potential

•Efficient support and acquisition vehicle

•Offers & creative quickly tested

•Opportunity to expand catalog distribution via a new channel

•Plans will be scaleable, allowing optimization based on back-end results

•Choose highly targeted editorial environments

•Aggressively negotiate sponsorships & value add across all relevant sites

•Use enriched ad models to maximize response and reach (I.e., Superstitials, DHTML, Advertorials, etc.)

CHANNEL SPECIFICS

Media Channel Rationale Strategy

Email

•Highly responsive medium w/ quick turn-around of results

•Begins a dialogue • Improves Loyalty & Reinforces brand

•Viral Marketing capabilities

•Provides a testing platform for creative & offers, applicable to offline media

•List selection based on % of reach against target audience, previous response history and list source

•Use rich creative formats to maximize response and reach (RadicalMail, HTML, etc.)

•Conservatively test to gain learning of responsiveness

•Aggressively negotiate value added opportunities with relevant web sites

CHANNEL SPECIFICS

CAPITALIZING ON THE CROSS COLLECTOR•Capitalizing on the cross collector is dependant upon the specific theme.

•Surround the collector in target vehicles that provide information or entertainment about their collectible category.

Star Trek Barbie

Star Trek Convention Attendees

Star Trek Communicator Magazine

MEASUREMENT - MARKETBUDGET MODEL • Analytical direct marketing tool, customized to your specific

business, that de-mystifies direct marketing programs

• Audits promotional event or series of events from upfront response to backend fulfillment and lifetime value

• Lays a foundation for making educated business decisions that return the strongest financial rewards

MEASUREMENT - MARKET BUDGET MODEL BENEFITS• Checkpoint for programs

– Confirms the best marketing/media decisions have been made

– Reassures that all spending is in line for strongest financial returns

• Forecasts response– Allows for accurate planning and budgeting of:

• Inbound calls and telemarketing requirements• Fulfillment collateral material

MEASUREMENT - MARKET BUDGET MODEL BENEFITS• Budgeting tool for management

– Fully loaded costs against promotional events

• Planning tool for management– Forecasts flowed response for monthly response/revenue

• Reporting tool for management– Constantly updated with actual results

OTHER CONSIDERATIONS• Revised Application

–capture key data–highlight “free” –delete date of birth–eliminate renewal message –make more “celebratory” and emphasize branding

• Acquisition Mail–designed and developed to be adaptable for

• GCC members• External DM uses• Statement Inserts

OTHER CONSIDERATIONS

• Develop a Mini-Dreambook – as a bind in to a pub

– as a bind-in to the GC Holiday Catalog

• Explore DRTV– determine potential of a “wrap” on current spot

WHY GREY DIRECT

• Commitment to Direct Marketing

• Strategic Thinking and Partnerships

• Consumer centric/data-driven solution

• Experience of people

• Powerful creative

• A Penny Saved…

THANK YOU!