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Dec 16, 2003
Case Study

Vermont Teddy Bear Uses Howard Stern to Drive Online Sales

SUMMARY: If you're a Howard Stern fan, or you just like radio ad creative that works, definitely check out this Case Study.

Vermont Teddy Bear's media buyers spend about 90% of their ad budget on radio ads. Interestingly, 55% of the resulting millions in sales now come online. Head media buyer Gerry Howatt shares tips and tricks to making radio work for you.
CHALLENGE

The problem with marketing teddy bears that can be sent as easy, personalized gifts, is that it's simply too appealing.

Products with such mass appeal are extremely difficult to direct response market because targeting everyone who knows someone who'd like to get a personalized bear as a gift is impossible. You can't buy that mailing list.

Vermont Teddy Bear, inventors of the Bear-Gram®, had to get their message out across America in the most appealing yet cost-effective way possible. They tested everything from online and email, to print catalogs, to radio.

Then they carefully asked every single incoming order to identify where that person had heard about Vermont Teddy Bear from. Plus, the Company created a chart showing when each marketing campaign took place, and measured average responses by quarter hour and zip code against any bumps.

"Tracking is our bread and butter," explains Gerry Howatt, Media Manager. "If we didn't track, we wouldn't exist. If you don't know where your orders are coming from, you don't know where to spend your money. We have a small army of people dedicated to analyzing where each sale is coming from."

This intensive tracking revealed that for Vermont Teddy Bear, radio was the killer app.

While the Company continued to invest in ongoing campaigns and tests in other media (a best practice even when you've found one overwhelming winner), it decided to devote almost 90% of the customer acquisition budget to radio.

When you've got so many of your eggs riding in one basket, you'd better do a darn fine job of carrying it.

CAMPAIGN

The media buying team tested and compared results between produced radio spots (where you hand over an already created audio file for the station to air) versus personality spots (where you ask a talk show radio personality to use their own words, hopefully following your suggested copy guidelines.)

Produced spots were much cheaper to run, and the stations have a lot more inventory to offer so you can't be bumped out of a position by a deeper pocketed media buyer. (Some stations only offer one personality spot per hour, plus talk show hours for popular FM stations can be limited to morning drive time.)

However, for Vermont Teddy Bear, campaign responses dictated that the media buying team focus the vast majority of their budget on personality spots.

-> Step one: Extranet site for radio stations

The team set up a special private Web site for radio personalities and related radio station staff (link below). It included just about everything a station could ever need:

o Direct contacts (phone and email) and photos of key media buyers at Vermont Teddy Bear

o Documents such as Tax ID sheets and blank RFPs (request for proposals), credit information, and various communication forms.

o Newest promotional copypoints and standard taglines

o Banners and logos if the station tosses in Web site presence as part of the buy. (Howatt notes online add-ons are decreasing dramatically these days.)

o Special discount forms for radio station employees who wish to purchase from Vermont Teddy Bear.

o Online order form for the radio personalities' use so they can try out the service at no charge whatsoever. (The idea being, if a guy like Howard Stern actually experiences what it's like to send a gift teddy bear to his Mom, he'll share his Mom's reaction and his resulting passion for the service on-air.)


-> Step two: Regular emails to stations

About every two weeks, the media buying team sent out an emailed memo to the radio personalities they're currently working with. It's upbeat and peppy - and cuts straight to the point. (Link to sample below.)

There's a list of copy points that personalities can pick from to work with in their 60-second spot. These can be embellished if the personality wants with his or her own comments and stories.

However, the memo also gives closing copy that personalities are asked to use verbatim for every spot. To help with campaign measurement, the last sentence always reads: "And tell 'em ____(your name)_____ sent ya."

Copy is sometimes varied depending on what state or region the radio station is in -- for example a Vermont-based station might mention the two retail stores. (There are no stores in other states.)


-> Step three: Regular "Dog & Pony Shows"

Several times a year - generally about three weeks before a big promotional push surrounding a holiday such as Valentine's Day starts - the media buyers go on a road trip, visiting top performing radio stations in as many key markets as possible.

They split up to cover more ground in a short time period. Vermont Teddy Bear's biggest markets - Boston, New York and Philadelphia - will get personal visits every road trip. Other markets will be covered at least once during the year.

Howatt's radio "dog & pony show" tips:

"Don't waste their time. These guys get up at 4am, they drive to work, prepare for the show, go on air at 6am, and they're done at 10.

"When I've got eight stations to see in a market it's very difficult - some are there waiting hours to meet with me. They need naps, they get cranky. Some just love spending time, but that's not the norm. Sometimes you get 20 minutes, sometimes it’s an hour."

Also, be prepared to get thrust on the air without warning. "I can't think of a market I haven't been on the air. It's not a paid spot, they'll just drag me into the studio."

Don't spout marketing-talk while you're on air. "It takes a certain decorum. I always manage to get the 800-number out there," notes Howatt. However, the rest of the conversation might be on politics, sports, or whatever's in the news. You have to pitch in like a regular guest. "Mainly just BS-ing."

The first time he was on-air, Howatt says everything happened so suddenly he had no time to be scared. But "now I get nervous because I know I can influence sales. I can sound stupid on-air and reflect badly on Vermont Teddy Bear." To get over nerves, he advises you to "just talk to the person sitting next to you - and don't think about the thousands of people you're really talking to."
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