Trading Spaces to Turn Up New Customers
It seemed like a typical consumer catalog from Dell Home Systems Co., but it wasn't. Between pages 14 and 15, and 38 and 39, was a bind-in for the Columbia House DVD Club (835DELLCO0104H). While the insert's product offerings complement Dell's, it is the first time we've seen this increasingly popular computer company carry an insert for another product.
So why did Dell do it? No one from Dell was available for comment, but according to Richard Grunsten, a consultant with GSP Marketing in Chicago, it's likely because Dell wants to offset mailing costs and track down new customers. "These are the two biggest reasons companies use inserts," says Grunsten. "Basically the cataloger is selling advertising space to another company that promotes products relating to the cataloger's demographic. And, more than likely, the next time Columbia House does a mailing, Dell will jump in ... it's a sort of reciprocity deal."
The two companies end up with a mail-order responsive list filled with potentially loyal consumer names. "Companies trade names all the time through one means or another," he adds. "Even competing companies buy names off each other because they realize they need to target to a greater number of people interested in the same type of products."
Grunsten reports that this tactic dates back 12 to 15 years, though he concedes it's an unusual tactic for computer companies to use. "Sharper Image used to run an insert for Chevrolet. That was many years ago when it was fashionable to put ads for other catalogs inside a catalog," he says. "It's more common these days to see airline mailings with inserts for rental car companies or hotels."
In Grunsten's 27-plus years of experience, this trading-spaces effort usually ends with mixed results. "Inserts like these do OK, but there is usually a subtle drop in sales volume for one of the companies involved," he says. "Consumers tend to have a certain amount of money they'll spend on direct response, which results in them purchasing from one company and not the other."
Another important aspect of the insert effort is its implied-endorsement factor. In essence, Dell is telling consumers it feels good about Columbia House and vice versa. "Consumers who trust Dell, will now trust Columbia House," explains Grunsten.
The Who's Mailing What! Archive also has seen inserts turn up of late in other catalogs besides Dell, including a J. Jill catalog (see cover) sporting an insert for Real Simple magazine (301JJILLD0104AX)a suitable duo that seems to share an audience. Whether or not this trading-spaces strategy turns into a pervasive trend remains to be seen.
Sharon Cole is a Philadelphia-based freelance writer serving the print industry.