Of Special Interest

Four out of five of Bookspan's marketing budget dollars will go for direct mail solicitations

MOST READERS have at least one specialized interest, be it crafts, mysteries, cooking or New Age spirituality. Whatever the niche, Bookspan wants to scratch it.

Bookspan, a year-and-a-half-old partnership between Bertelsmann AG's Doubleday Direct Inc. unit and Time Warner's Book-of-the-Month Club Holdings, currently operates over 40 niche book clubs. Company executives predict that number could balloon to more than 100 in the next few years; indeed, half a dozen new clubs have already been started by the two partners over the last three years.

Changes to a nine-figure marketing budget reflect the increased importance Bookspan's niche clubs represent. Of the 185 million direct mail pieces it sends out annually, between 30% and 40% solicit for the smaller, focused programs. Five years ago, niche marketing accounted for only about 10% of Bertelsmann's efforts.

At the same time, the company's strategy calls for maintaining member levels in the general interest programs, replacing lapsed individuals with new ones.

“General interest [which includes Bookspan properties Book-of-the-Month Club, The Literary Guild, Quality Paperback Book Club and Doubleday Book Club] is not growing,” says Seth D. Radwell, Bookspan's executive vice president. “We can differentiate [customers] in the specialty offerings, and offer a better value proposition.”

In fact, some of the niche clubs are giving the traditional ones a run for their money. Enrollment figures of the venerable general interest Book-of-the-Month club are 700,000, while Black Expressions, an African-American focused program launched in 1999, boasts 400,000 members.

Such efforts will be key in growing Bookspan's file. Currently the company has 10 million memberships overall, representing between 7 million and 8 million unique consumers. New members will increasingly come from the smaller, more focused clubs such as One Spirit, Mystery Guild, Good Cook, Children's Book-of-the-Month and Antiques Roadshow.

Between 2000 and 2001 Bookspan increased its marketing budget by single digits. Much of Bookspan's expenditures will go for direct mail solicitations. The new club marketing mix earmarks four out of five dollars in its budget for mailings, which usually consist of slim-format catalogs, with the rest evenly split between space advertising and online sponsorships, Radwell says.

Such a Niche!

Traditions, a largely secularly focused Jewish book club, mailed its first test in March and relies entirely on paper mailings, although online advertising programs are being considered. The 400,000 catalogs mailed yielded only a 1% response, or 4,000 members.

To improve response, the club may change the mix of names it pulled to solicit. Roughly 20% of the 24-page self-mailer, which offered three books for $3, went to Bookspan house names. These prospects were the top performers of the entire test, notes Michelle Berger, Bookspan's vice president of new product development, who is overseeing the Traditions rollout.

The rest of the names were pulled from subscriber lists from Jewish publications, people who had purchased Judaica by mail, and donor lists to Jewish organizations.

The 1% response rate was smaller than other launches, which may have been due to a slight tilt toward religious lists, while the mailer's offerings were of a more secular nature.

But Traditions' average order size was the largest seen by any club launch, with average revenue one and a half times that seen in most other launches and three times that of the average order size from established clubs.

Bookspan will monitor the progress of Traditions, not making any decisions before fall 2001, at the earliest. Asked about the chances for its survival, Berger said “We are comfortable that we will get the right amount of members to join to make it a profitable and viable club. We have high hopes for it.” To survive, Traditions will need to acquire a minimum of between 50,000 and 100,000 members.

Web-based Communities

But just because the marketing dollars are tilted toward direct mail doesn't mean that Bookspan is not taking advantage of a variety of online channels. Radwell estimates that somewhere between 30% and 40% of Bookspan's members access their club's Web sites.

While Traditions has not yet explored the full potential of online marketing, another recently developed club, Black Expressions, has had a great deal of success in taking advantage of online partnerships. Since its launch as part of Doubleday Direct's offerings, many members have joined via e-mail, banner advertising and third-party site partnership programs, such as with Black Planet.

Radwell is enthusiastic about the online channel as a prospecting tool, a marketing strategy the Doubleday Direct properties brought to all the clubs that ultimately made up Bookspan. “We get good, quality enrollees at a good economic rate,” he says.

Going forward, Radwell anticipates a strong sales tool developed from merging the files and marketing capabilities of the properties that make up Bookspan. “It's already there for the Doubleday properties, but the other ones are still being integrated,” Radwell says.