Getting Consumers to Love the Valpak Blue Envelope

Cox Target Media provides direct-marketing services and solutions to advertisers who want to reach specific target audiences. Its first branded product, the Valpak blue envelope, has been mailed to consumers for over 35 years and is currently distributed to more than 50 million homes and businesses throughout the United States, Canada, Puerto Rico, and the United Kingdom. Every year, 500 Valpak mailings deliver over 15 billion coupons and advertising offers to consumers in highly recognizable light blue envelopes. Valpak is sold through a network of over 220 independent franchisees and has a varied reputation that depends on the quality of the local business owner and content mix. As a direct-mail product, Valpak relies on consumers to open the envelope and examine the contents to spur increased redemptions of the coupons and other promotional offers for its clients' products.

In 2001 Cox Target Media conducted extensive research to determine the overall awareness, growth potential, and consumer perception of the blue envelope. The research showed that Valpak's blue envelope was perceived as a locally mailed product and that its dated design, which had not changed in 15 years, was a turn-off to image-conscious national advertisers. Cox wanted to attract new advertisers as users of its service and leverage relationships with its existing clients, and it recognized that these problems had to be addressed. In 2002 Cox redesigned the blue envelope and launched an extensive advertising campaign to reposition Valpak with the consumer. The new design includes an updated Valpak logo as well as a Valpak.com logo to send shoppers online, splashy graphics and re-energized blue colors to refresh the envelope, and lively color photos that change with the seasons.

Cox also created the Valpak "Loves" advertising campaign with the goal of upscaling the Valpak image in the mind of consumers and potential advertisers. The campaign was designed to connect the contents of the blue envelope with the activities and objects that are already central to the end users' lives. Four television commercials and four complementary print ads were created featuring consumers who closely profile the demographics of people who already take advantage of the coupons and other savings offers found within Valpak. They are everyday,yet upscale, people who enjoy everyday pleasures like improving their homes or engaging in a family outing. The ads also highlight the categories of content and savings that Cox's research indicated consumers want to find inside the blue envelope. The tagline used in all of the commercials and print ads is "There's something in it for you," which

reinforces the benefits consumers receive from the offers contained in the Valpak envelope.

The four TV commercials created for the campaign ran on national spot television in 92 Nielsen Designated Market Area territories. Valpak franchise owners were also invited to supplement the national spot placement by purchasing additional time on local stations. Two of the commercials were adapted to 10- and 20-second formats to accommodate the inclusion of local advertiser's logos or information or local Valpak mailing-date information. For the national print campaign, Valpak ads were run in a selection of women's aspirational magazines including Martha Stewart Living and Oprah as well as service publications such as Woman's Day, Redbook, and Good Housekeeping.

The "Loves" campaign has been successful in improving both consumer and advertiser perceptions of the quality associated with the Valpak brand and the contents of the blue envelope. Valpak has always been perceived as the best, as well as the best known, of all the cooperative direct-mail marketing vehicles. The repositioning campaign has helped Cox attract a number of high-profile, national advertisers as promotional partners, including 20th Century Fox Studios, CBS, H&R Block, and Burger King. It has also been successful in getting consumers to think twice before tossing out the ubiquitous blue envelopes that appear in their mailboxes. They know there truly is "something in it" for them.

Source: Melissa Fisher,vice president of marketing and communication,Cox Target Media.

own coupons can be quite selective about recipients. Another important advantage of direct-mail couponing is a redemption rate of over 3 percent, much higher than for FSIs. Direct-mail couponing can also be combined with a sample, which makes it a very effective way to gain the attention of consumers.

The major disadvantage of direct-mail coupon delivery is the expense relative to other distribution methods. The cost per thousand for distributing coupons through co-op mailings ranges from $10 to $15, and more targeted promotions can cost $20 to $25 or even more. Also, the higher redemption rate of mail-delivered coupons may result from the fact that many recipients are already users of the brand who take advantage of the coupons sent directly to them.

The use of newspapers and magazines as couponing vehicles has declined dramatically since the introduction of FSIs. In 2001 only 1.3 percent of coupons were distributed via newspapers. The advantages of newspapers as a couponing vehicle include market selectivity, shorter lead times with timing to the day, cooperative advertising opportunities that can lead to cost efficiencies, and promotional tie-ins with retailers. Other advantages of newspaper-delivered coupons are the broad exposure and consumer receptivity. Many consumers actively search the newspaper for coupons, especially on Sundays or "food day" (when grocery stores advertise their specials). This enhances the likelihood of the consumer at least noticing the coupon. Problems with newspapers as couponing vehicles include higher distribution costs, poor reproduction quality, clutter, and declining readership of newspapers; all contribute to low redemption rates.

The use of magazines as a couponing vehicle has also declined steadily since the introduction of FSIs. Magazines now account for only about 2 percent of the total number of coupons distributed each year. Distribution of coupons through magazines can take advantage of the selectivity of the publication to reach specific target audiences, along with enhanced production capabilities and extended copy life in the home. However, the cost of distributing coupons through magazines is very high and redemption rates are low (just under 1 percent).

Placing coupons either inside or on the outside of the package is a distribution method that accounted for about 3 percent of the coupons distributed in 2001. The in/on-package coupon has virtually no distribution costs and a much higher redemption rate than other couponing methods, averaging between 3 and nearly 14 percent. An in/on-pack coupon that is redeemable for the next purchase of the same brand is known as a bounce-back coupon. This type of coupon gives consumers an inducement to repurchase the brand.

Bounce-back coupons are often used with product samples to encourage the consumer to purchase the product after sampling. They may be included in or on the package during the early phases of a brand's life cycle to encourage repeat purchase, or they may be a defensive maneuver for a mature brand that is facing competitive pressure and wants to retain its current users. The main limitation of bounce-back coupons is that they go only to purchasers of the brand and thus do not attract nonusers. A bounce-back coupon placed on the package for Kellogg's Eggo brand waffles is shown in Exhibit 16-15.

Another type of in/on-pack coupon is the cross-ruff coupon, which is redeemable on the purchase of a different product, usually one made by the same company but occasionally through a tie-in with another manufacturer. Cross-ruff coupons have a redemption rate of 4 to 8 percent and can be effective in encouraging consumers to try other products or brands. Companies with wide product lines, such as cereal manufacturers, often use these coupons.

Yet another type of package coupon is the instant coupon, which is attached to the outside of the package so the consumer can rip it off and redeem it immediately at the time of purchase. Instant coupons have the highest redemption levels of all types of coupons, averaging around 18 percent for grocery products and jumping to over 40 percent for health and beauty items. However, the redemption level is

Continue reading here: Exhibit 1616 Catalina Marketing promotes its checkout coupons

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