Hershey Kisses

Folio: The Magazine for Magazine Management, June 1, 2001 by Thom Weidlich

Hershey Direct e-mails its gift-givers to entice more sales

hershey Direct, with $15 million in sales last year from both catalog and online, is a small part of its $4-billion-in-sales parent, Hershey Foods Corp., Hershey, PA, one of the best-known brands in the country. "We're the only direct-to-consumer business unit in Hershey," says Carey Eisenhauer, Internet marketing manager for Hershey Direct.

Hershey's Gifts, part of Hershey Direct, is a good example of a fairly small Web operation just beginning to explore how to use e-mail to communicate with its customers. And it sells a fun product--chocolate!

Begun about 15 years ago, the direct division markets unique products meant for personal and corporate gift-giving, such as five-pound milk-chocolate bars, three-pound chocolate Easter bunnies and chocolate cards.

The catalog drops six times a year. It's sent every month for the year-end holiday season, from September to December, to 5 million names. Then it is dropped in January/February for Valentine's Day and February/March for Easter, to a total of a million names. The current catalog is 16 pages and in the fall it increases to 24.

Hershey's Gifts debuted its e-commerce site (www.hersheygifts.com) in May 2000. The number of products at the site varies depending on the time of year. Currently there are about 120 and it can feature as many as 150. During last fall's campaign, the average purchase was just under $200 from the print and online channels.

The site started using e-mail only last August. "It's primarily a way to introduce new products for the season," Eisenhauer points out. "We promote our free electronic postcards. In the off-season we try to introduce subscribers who don't know about non-seasonal items, such as thank-you and congratulation cards."

The site has a VIP section that allows members to use a gift-reminder service, address book and other features. When Hershey's began sending e-mail, it took the names from the VIP database. It sent an introductory newsletter that included a link to opt-in to receive the newsletter at the VIP profile page.

The e-mail was sent to 9,000 people and about 10% signed up for it. (The newsletter is also promoted through a link on the home page.)

Eisenhauer says the copy was purposely soft-sell. "All we wanted to do was introduce people to the newsletter," he says. "The copy said, 'If you do not wish to opt-in to the newsletter you don't need to do anything. We're not going to bother you again.'"

There are now 4,500 subscribers. Consumers and businesses receive separate e-mails--sales are about split between the two. "For consumers, it's essentially new product introductions, especially around the seasons," Eisenhauer remarks. "For businesses, we try to focus on things they might give to employees."

Business products include company overwraps for 1.55-ounce and four-ounce Hershey bars, custom molds with company logos and office candy assortments. Other gifts include chocolate cards, a chocolate PC with the recipient's name across the screen and a giant birthday tower of yummies.

Currently Hershey's Gifts is not segmenting the e-mails it sends out. "As the subscription base grows, there will definitely be opportunities to segment along ZIP code, the nature of the product and other ways," Eisenhauer indicates.

Criss Kerkendall, direct marketing manager of Hershey Direct, concurs. "The more we evaluate the information and see what our customers' needs are, the more we can tweak it and segment it based on that," she says. "We really do want to make our customers happy. There's nothing worse than getting e-mail you don't want."

The e-mails are used for selling but Eisenhauer says he'd also like to be able to do softer, informational mailings such as Lands' End does. One difficulty is that Hershey's Gifts has only one person overseeing e-mail efforts who also has many other responsibilities.

"It's a great tool," Kerkendall observes. "We don't have the customer base yet. We're trying to gather up and collect more e-mails so we can use it to the full extent. We're gearing up for the fall."

Eisenhauer maintains that the company has seen small spikes in sales when e-mails are sent out, but the subscriber base is too small to tell how much the e-mail has been responsible. "Our unsubscribes are fairly low," he adds, "and that's a good sign."

The company views the VIP service as a retention tool. The site sends reminders to this group a few weeks before holidays and also sends special promotions. The address book is attractive to businesses, Eisenhauer says. Hershey also has a distribution-list feature that allows users to copy over the names from their address books and send one item to the whole list.

The company engages in other loyalty activities too. Once a quarter last year, Hershey's Gifts sent out a sample of a product--such as a giant chocolate kiss--in appreciation for customers' business and included a catalog.

"It wasn't a hard sell," Kerkendall says. "It was 'thank you for being a loyal customer.' We have a bunch of initiatives similar to that under way for this year."