February 20, 2003, 12:00 AM

How American Greetings used multiple channels to sign up paid e-subscribers

AmericanGreetings offered $10 gift cards to Kmart, free subscriptions to Conde Nast publications and other multi-channel approaches to convert its free e-card subscription to base to 2 million subscribers in two years.

 

Many web pundits admire American Greetings Corp. for having the nerve 15 months ago to convert its free e-greeting cards to paid, blazing a trail for paid content on the web. The move was a boon for American Greetings, Allison Landers, director of acquisition marketing, told the eTail conference Wednesday. Today, AmericanGreetings.com has 2 million customers paying $13.95 a year to send unlimited e-cards.

American Greetings reached that milestone, which Landers says represents the largest non-ISP subscription base on the web, with a combination of online and offline marketing with a variety of partners. While the partner component is important, it’s not always easy, she said. “You have to be a pit bull with your partners to make sure you have the best offer,” she said. “You have to stand up for your customers.”

One of the most effective techniques, she said, was a $10 Kmart gift card for new subscribers. 40% of those who received such cards redeemed them and, even more important to Kmart, they used the cards to obtain discounts on large purchases, not just to obtain $10 in free merchandise. “It was an amazing redemption rate and in a troubled time for Kmart it was like gold to them,” Landers said. “Customers could have bought $9.95 at Kmart, but instead they used the coupons on things like tires and other higher-ticket goods. It was bigger than anything I would have predicted.”

The Kmart link was important because part of American Greetings’ web strategy is to drive customers to stores. American Greetings operates 1,000 American Greetings, Carlton’s and other stores and provides the card departments in Kmart, Target and CVS stores.

Just as it drove customers to Kmart stores with gift cards, American Greetings also drove customers to stores with an e-mail coupon for $1 off on the purchase of three cards in a store. Cross-channel promotions are key to marketing success, she said, but retailers must ensure that their cross-channel message is consistent. “It is important to link marketing programs--they must contain the same message, the same offer, the same everything in direct mail, e-mail and web visits,” she said.

Landers is convinced, however, that not just any promotion would have worked in converting free customers to paying customers; the offer must have strong perceived value, she said. Kmart originally wanted a $5 card, she reported, but she pressed for $10. “A $5 card not motivating enough,” she said. “But with the negative press they were getting and the declining sales in their stores they were eager to do something.” She pushed for and got the $10 card.

American Greetings also worked out a deal with Conde Nast publications, whose subscribers have demographics similar to American Greetings’ customers. The offer, promoted on the web site and in e-mails, gave three free months of three Conde Nast magazines for a one-year, $13.95 subscription to American Greetings.com “In a very short period of time we got 20,000 subscribers,” she said.

 

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