Using Direct Marketing to Reach Families with Young Children

Families with children under the age of six are responsive to targeted direct marketing programs. This group, like any in a new life stage, is looking for information about products and services, so properly targeted messages can be the ideal form of communication.

OVERVIEW

Companies that market products or services through direct mail to families with children under the age of six are directing communication to a household that is filled with the need for information and, for the most part, prepared to spend money. Not only is the number of such households increasing but, thanks to the Internet, they can be targeted more accurately with personalized e-mail and user-friendly Web sites.

Before launching direct mail programs to families with young children, however, remember that you are not targeting a homogenous group. Parents with newborn children have very different needs from those with children who are five or six and eager to participate in purchasing decisions.

Whichever group you decide to focus on, experts say that young families is one consumer group that embraces targeted direct mail promotions. Their response to retail promotions, coupons, requests for product samples, and usage of product samples exceeds the usual ranges. Research also shows a high "opening rate" and a high recall of the mailings.

"In young families, targeted mail gets a little bit more attention than other media, such as TV or radio," says Mike Starkey, executive vice president of Market Logic, a Costa Mesa, CA, direct marketing company that sends targeted offers to young families. "Anyone who has a family knows how chaotic it is. TV, radio, even the newspaper are luxuries in their lives. The only thing they look at is the mail."

TARGETING PARENTS

Before targeting families with children under the age of six with a direct marketing campaign, be sure that you have a database of households that fit this demographic profile and, more important, that regularly respond to direct mail. One of the best ways to do this is to purchase or rent a database of responsive households in this demographic group.

One company that offers programs that use these types of databases is Madison Direct Marketing, Greenwich, CT. Culling a variety of public and private sources, Madison first identifies families likely to respond at higher rates to marketing activity in the mail, on the telephone, or though the Internet. Next, it selects specific demographic groups, such as households with children under six, and uses these groupings as the basis for a targeted cooperative direct mail program for retailers and manufacturers.

This consumer information could focus solely on families with children under six (a single-factor selection) or the data could be analyzed with various modeling programs to create unique selections, such as households with children under six within a specific income level or geographic area.

You could also focus your selects by age of child. That way, you can target your mailings to subgroups, such as new parents, households with children aged two to five, and those with children six and older.

"You have to make sure the message and the offer is relevant," says Starkey, who bases his programs on compiled lists of young-family households, an in-house list, or a combination of the two (see Tools of the Trade). "A new-parent household and families with children under two years old have a different set of circumstances and needs than a family with a child who is five or six years old and attending school. Within that six-year time frame, you have a lot of diversity."

For the most part, direct marketers aim their messages at parents, though opinion is divided on that subject. "We never want to be communicating to the child," says Starkey. "The buying power for that group remains with the parents." When focusing on the busy parent, "you should always make sure your direct mail piece is as clean and simple as possible," he adds.

THE PRIVACY ISSUE

There is another good reason for directing a mailing to parents rather than to a young child. "There are privacy issues," says Selina Guber, president of Children's Market Research, a New York City research and consulting company. "Parents do not like the idea of their children being on mailing lists and receiving mail."

A viable alternative, Guber says, is to have the address read something like, "To the Mother of Mary Jones." That way, the parent can be the gatekeeper but the focus of the mailing remains on the child. For programs of this sort, it makes sense to design a mailer that will appeal to children, says Guber, who recommends something with a lot of colors and graphics, so that "kids will want to pick it up,"

The privacy issue can be challenging to direct marketers, regardless of whether they are targeting parents or children. "The nature of direct marketing can be intrusive to some degree, in that you are trying to drive new customers into a retailer based on the fact that you know they have young children," says Market Logic's Starkey. "Some folks question how [marketers] get this information and how they know a family has just had a child. As a result, you have to be careful about the integrity of the list you are dealing with. You have to make sure the list is 'opt-in.'"

STATISTICS

One reason to target families with young children is that this group is growing. There are 19.1 million children under the age of five in the U.S., according to the 1999 "Under-Five Crowd" study from Children's Market Research. The largest percentage of these children (35 percent) lives in the South. The rest live in the Northeast (25 percent), the Midwest (22 percent) and on the West Coast (18 percent).

Two other highlights of the study: Most of these children live in two-parent households, and boys outnumber girls 51 percent to 49 percent.

Parents in this group have a lot of money to spend, and they spend it on mail order purchases primarily because they don't have much time to shop at stores. The Direct Marketing Association's Statistical Fact Book '99 reports that 71.3 percent of adults living in households with children under the age of two purchased merchandise and services by mail or phone in 1998. That is markedly higher than the 65.6 percent for households with children aged two to five and 65.3 percent for households with no children.

Young families also regularly purchase products through the Internet. According to a study by MediaMark Research, a New York City market researcher, more than 8 percent of households with children under the age of six have purchased products through the Internet during the past year.

These households also love coupons. The MediaMark study found that over 56 percent of households with children under the age of six have used cents-off coupons in the past year.

Not surprisingly, the DMA's Statistical Fact Book shows that 8 percent of adults living with children under two bought toys by mail or phone in 1998, compared to 8.5 percent for adults with children aged two to five and only 2.5 percent for adults with no children.

Significantly, parents of young children use credit cards extensively and are excellent prospects for all sorts of products sold via direct marketing. For example, 5.1 percent of households with children under two years of age purchased auto accessories through the mail in 1998, versus 3.8 percent of adults living in households with no children.

Even more intriguing, perhaps, are the reading habits of this group. The DMA study found that while only 8.7 percent of adults in households with no children belonged to book clubs, the percentage rose to 10.7 percent for adults with children under two years of age and 10.9 percent for those with children aged two to five.

TOOLS OF THE TRADE

Before launching a direct mail program to young families, you'll probably have to enlist the help of service companies, such as those described below.

Consultants. They can save you time and money by filling you in on the basics, helping you design a program, referring you to vendor sources, and helping you track your progress.

List services. You will need to buy or rent lists of households with children under six, and you can get them from a variety of places, including:

• List owners, such as magazine publishers, government agencies, and other organizations that sell the names, addresses, and phone numbers of people who use their products and services;
  
  
• List compilers, who market their own databases of household data that they cull from public and private sources;
  
  
• List brokers, who market other company's lists, often for a fee that is less than what you would pay if you approached the company directly.

Before you start shopping for lists, however, take a sheet of paper and write down the characteristics that you expect qualified prospects to have. Think about the associations, clubs, or other organizations to which they are likely to belong. What publications do they read and what types of products do they buy? After you have completed this process, contact the organizations that best match your profile and see of you can rent their lists.

In all likelihood, you will also need a company called a list manager to help you maintain and prepare your mailing lists. A list manager can help you incorporate your own house list in your direct marketing program by collecting the names of customers and prospects who have responded to previous promotions and advertising.

Creative services. If you're not using a full-service agency, you'll need copywriters and designers, and the best way to find them is through referral. Look at companies in your business that have achieved direct-mail success, and find out who they use. Check out any agency or freelancer you are considering. Look at samples of work similar to yours, and be sure to negotiate pricing in advance.

Printers and lettershop services. The same rules apply for selecting printers and lettershop services (labeling and mailing). Get a reliable referral from a company similar to yours. This is important, since it is critical to match the capabilities of these vendors to your needs. A large lettershop that specializes in mailing quantities of 1 million or more is probably not the best choice for the occasional small mailing.

Direct marketing companies. A full-service direct marketing company is equipped to help you aim your program at a specific group. Companies such as Madison Direct Marketing use database marketing techniques to target specific demographic groups. Madison Direct Marketing, which specializes in targeting the young family market, offers several programs with such labels as "New Parent" and "First Birthday."

Companies of this type often put together cooperative campaigns involving several advertisers. One form is an envelope with special-offer coupons from several advertisers mailed to households that fit a specific demographic or lifestyle profile. Another is a card-deck program, which might consist of 30 to 100 postcards, usually postpaid, in a single envelope or polybag. The cards present offers from different advertisers. Sometimes a single company will use a card deck to showcase several items from its product line.

CASE HISTORIES

Sesame Street magazine has marketing to families down pat. After all, the Sesame Street PBS-TV program is the No. 1 program that parents watch with their children. Obviously, these parents enjoy connecting with their kids.

That helped a lot when the magazine launched a card deck that included advertisers of products aimed at families with young children. "Sesame Street magazine is one of the first children's publications to mail this kind of card deck," says Mario Lupia, sales manager of the Weehawken, NJ-based SpecialLists marketing services division of ClientLogic, which is handling the pack. "They are going to be one of the first to reach this marketplace."

Sesame Street magazine features stories, games, and workshops written for children between the ages of 2 and 6. The median age of parents subscribing to the magazine is 36, and they have a median household income of $65,000. "These kind of people are usually interested in entertainment, computer software, books, videos, and financial products," says Lupia.

The magazine's circulation is 1.2 million. However, the pack was sent to only 200,000 of its most recent subscribers, because new subscribers usually are the ones most responsive to such offers. The magazine plans to follow up with three mailings to 500,000 subscribers.

Children's Television Workshop, the New York City company that publishes the magazine, views the card-deck program as a logical tool to generate new business. Says CTW business developer Caroline Farnsworth, "This presents us with an opportunity to leverage our file and our brand name."

Babyshoe.com is attracting attention in direct marketing circles because it is an online company that incorporates traditional paper-based mail in the marketing mix as it seeks to reach busy families. The Hendersonville, NC, merchandise cataloger mailed a 24-page catalog to its house file of 70,000 names, offering products from piggy banks to rubber-ducky lamps. The main feature of the mailing: the company's signature NameDate baby shoes, keepsakes that it imprints with a newborn's name and date of birth. So pleased is Babyshoe.com with direct mail that it is working with Mokrynski & Associates, Inc., a Hackensack, NJ, list broker, to expand the catalog program by using 10 to 15 rented lists.

FINDING A SUPPLIER

There are many resources to help you research the young family market and find suppliers. The following is a sample:

Direct Marketing List Source provides more than 19,000 lists in 212 market classifications. Includes information on more than 700 business and consumer co-op and package-insert programs. Six issues, supplemented by six issues of the "Bullet" newsletter. An online version of the list source is included as part of the subscription. Lists are updated nightly, and the site also provides Web links to list brokers, managers, and compilers. $514/yr. Call 800-851-7737; go to http://www.srds.com.

Direct Marketing Marketplace includes listings of service firms, suppliers, and direct marketing agencies plus associations, events, and periodicals. $269/yr. Call 800-521-8110.

The DMA 1999 Buyers' Guide lists suppliers that provide direct marketing goods and services in 30 business categories, including alternative media, direct marketing media, direct response packaging, and sales promotion. Free to DMA members. Call 212-768-7277.

ASSOCIATIONS

Direct Marketing Association (DMA), with 4,600 member companies worldwide, is the primary association for companies involved with direct marketing. Member benefits include seminars and conferences, a membership directory, newsletters, journals, use of the DMA library and resource center, and access to the DirectLINK online information service (see Online Resources). Call 212-768-7277; go to http://www.the-dma.org/.

CONFERENCES AND SEMINARS

DMA 83rd Annual Conference and Exhibition is the largest direct marketing show. Includes a full floor of exhibits as well as professional seminars. Oct. 15-18, 2000, in New Orleans. Call 212-790-1500; go to http://www.the-dma.org.

DMA Professional Development and Training Seminars cover such subjects as business-to-business marketing, telephone marketing, and catalog selling. Held at various locations in the U.S. throughout the year. Call 212-768-7277; go to http://www.the-dma.org/.

KEY RESEARCH

Statistical Fact Book '99 reports on consumer buying habits, industry projections, and cost comparisons, using statistics from many sources. The book is organized into five sections: Direct Response Advertising, Media, Lists & Databases, Market Applications, and Practical Management. It Includes nearly 500 charts and graphs. $109.95 to DMA members, $165.95 nonmembers. Call 301-604-0187; go to http://www.the-dma.org.

"The Under-Five Crowd" is a syndicated study produced annually by Children's Market Research, a research and consulting company in New York City that specializes in strategic planning. $595. Call 212-794- 0983.

BOOKS

Targeting Families: Marketing to and Through the New Family, by Robert Boutilier. This book helps direct marketers understand today's families and how they differ from families of past decades. It explores how purchase decisions are made and how individual family members influence those decisions. 161 pp. 1993. American Demographics Books. $29.95, through Amazon.com $29.95.

Successful Direct Marketing Methods, by Bob Stone. The author is one of the most authoritative sources in the direct marketing industry. 560 pp. 1996. NTC Business Books. $49.95, through Amazon.com $34.97.

The Complete Direct Marketing Sourcebook: A Step-by-step Guide to Organizing and Managing a Successful Direct Marketing Program, by John Krenmer. Topics include designing effective promotions and finding and testing lists. 288 pp. 1992. John Wiley & Sons. $27.95, through Amazon.com $22.36.

2,239 Tested Secrets for Direct Marketing Success, by Denison Hatch and Donald R. Jackson, includes helpful, easy-to-understand tips for successful direct marketing to targeted groups. Hatch, the lead author, is the consulting editor to Target Marketing magazine and founder of "Who's Mailing What," a collection of more than 150,000 mailings compiled over the years. 320 pp. 1997. NTC Business Books. $39.95, through Amazon.com $39.95.

PUBLICATIONS

The following publications periodically cover direct marketing to families with children under the age of six:

American Demographics, monthly, is targeted at marketers whose information needs center on understanding consumer trends and behavior. Circulation 35,000. Call 800-529-7502; go to http://www.demographics.com.

"American Demographics Forecast" is a monthly newsletter with in-depth demographic information. Call 800-529-7502; go to http://www.demographics.com.

DIRECT, 16x p/year. The authoritative resource for direct marketing professionals, DIRECT delivers detailed coverage of every aspect of successful direct marketing, and helps marketers find, reach and keep their customers. Free for qualified subscribers. http://www.directmag.com.

DM News, the weekly newspaper of record for direct marketers, has a large classified section and source directory in addition to news. It covers seminars and conferences and runs features on a variety of direct marketing subjects. Circulation 40,000. Call 856-786-4780; go to http://www.dmnews.com.

Target Marketing, monthly, is aimed at direct marketing professionals. It includes regular features on lists and sources. Circulation 35,000. Call 215-238-5443; go to www2.targetonline.com/tm/default.html.

Direct Marketing Magazine, monthly, focuses on database marketers. Features cover a wide range of issues. The magazine maintains both an audio and a video library plus a well-organized directory. Circulation 18,200. Call 516-746-6700.

ONLINE RESOURCES

Lots of information about using direct marketing to reach the young family market is available online. Some of the following services provide it regularly, others occasionally:

DM Plaza is a direct marketing mall, with list-broker listings and links to their sites. Go to http://www.dmplaza.com.

Direct Marketing World offers resources for direct marketers, including a library of articles and newsletters, information about catalog companies, and a job bank. Go to http://www.dmworld.com.

ListsNOW.com provides mailing and telemarketing lists without the usual minimums (a boon for smaller direct marketers). You'll also find links to other useful services and information sites. Go to http://www.listsnow.com.

DirectLINK Online is an online database available to DMA members. It offers access to 150 direct marketing and business-related magazines, newspapers, and newsletters; 800 reference books and directories on direct marketing and related topics; 1,500 direct marketing case studies; research reports; and company information. Go to http://www.the-dma.org/.

RELATED SMN ARTICLES

For information related to this article, see #1010, Direct Marketing, Part 1; #1020, Customer Profiling and Modeling; #6016, Integrated Marketing; and #9105, The New Marketing.