Use of in-home sampling has mushroomed, fueled in part by the boom in Internet commerce. The ability to target specific demographic groups and lifestyles is a key selling point for such in-home sampling techniques as direct mail, door hangers, newspaper and magazine pouches, and catalog-merchandise packages. This article describes trends in in-home sampling, citing its advantages and disadvantages along with sources of additional information.

OVERVIEW

Marketers are constantly seeking better ways of getting consumers to try a product before they purchase it. Regular-size or specially packaged samples often are distributed outside stores, inside in dump bins, or as inpacks or onpacks.

More effective targeting of specific consumer groups, however, can be achieved by delivering samples to the home. Prime methods for doing that include direct mail, hanging samples on doorknobs, sealing them in newspaper or magazine delivery pouches, and inserting them in packages of merchandise sent out by catalog houses.

In 1998, companies spent slightly more than $1 billion on all types of sampling, an increase of 9 percent over the previous year, according to Promo magazine. In-home sampling proved the fastest-growing segment of the business, in part because newspaper-pouch delivery of samples blossomed and offering of samples via the Internet took off.

About 20 percent of sampling goes direct to homes via a variety of delivery methods, says Tom Butler, co-chair of the Promotion Marketing Association's Product Sampling Council, an umbrella group for sampling users and service companies. Citing figures from the Promo study, Butler, who is president, in-home division, of the Sunflower Group, Overland Park, KS, divided the remaining 80 percent of the sampling universe into two categories. About 65 percent of sampling dollars are spent on in-store events, he says, and 15 percent goes for special events, such as fairs, sporting events, and intercepts at malls, theaters, and beaches.

Research shows that samples delivered directly to the home have a better chance of being tried immediately than, say, samples given out at shopping malls. If the sample population has been selected properly, in-home sampling also ensures that the appropriate consumer in terms of demographics and buying patterns will receive the sample.

The fact that a sample is used at home is a more important factor than it used to be, says Jesse Reif, sales director of Bounty SCA Worldwide's Young Family Division in Glenview, IL. Bounty distributes samples primarily via outlets serving defined audiences, such as classrooms and doctors' offices. "Lots of marketers are looking at samples used in the home," says Reif, who, with Butler, is co-chair of the PMA's Product Sampling Council. "They want to make sure that the sample makes it home and is used at home. People are so short on time and they have such short attention spans that you have to get the product into their hands to get trial."

DEFINITIONS

Types of in-home sampling include:

Solo mailings consist of single sample products mailed to the home.

Catalog packages. In what could be classified as a variant of solo mailings, a product sample or a piece of promotional literature is sent inside a package of merchandise the consumer has ordered from a catalog. This guarantees that the person who gets the sample is the person the sampler wants to reach. For instance, a shampoo maker can appeal to women 20-45 who are appearance-conscious by shipping a sample with merchandise ordered from the Newport News Fashion catalog.

Co-op direct mail programs allow manufacturers with similar target groups to share the costs of addressing regular sample mailings to demographically selected households. Bundles of products are mailed to consumers, sometimes at their request. For example, the Carol Wright program, a product of Cox Direct, Largo, FL, offers packs of product samples and coupons aimed at households with children 17 and under. TargetMail, a program of Toronto-based ICOM Information and Communications, Inc., mails customized sample packages to 9 million households each year. Coupons offering cents off the regular retail price on subsequent purchases are included with samples about half the time, according to Cox Direct.

Newspaper pouch delivery brings an individual sample to the home with the local newspaper in an imprinted pouch. To a lesser extent, magazine polybags are used for the same purpose. Pouch delivery is driven by such newspaper insert publishing giants as the Sunflower Group, Vlassis in Chicago, and News America Marketing in New York City, according to Promo.

Door hangers are packages of single or multiple samples hung on door knobs. Cox Direct, which surveyed consumers about the effectiveness of this method for the first time in 1997, reported that 20 percent of consumers prefer to receive samples via door hangers.

COSTS AND TRENDS

Both packaged goods marketers and purveyors of services have turned to in-home sampling to find new customers. For example, Procter & Gamble distributed 80 million samples in the fall of 1999 to launch a Cover Girl Smoother makeup line. The samples were delivered to targeted homes via door hangers or newspaper pouches.

"With so much competitive clutter, sampling is a very arresting way to get product trial," says Bounty's Reif. "It's expensive but very effective. Sampling always produces measurable payout." The cost lies mainly in producing samples, not in the delivery. A typical sample pack can cost 50 cents to make and just 10 cents to deliver.

Based on Promo's 2000 Sampling Chart of suppliers, newspaper pouch delivery costs between $160 and $200 per thousand pieces. Samples delivered with catalog merchandise range in price from $65 to $185 per thousand, depending on the weight of the sample, according to Doug Guyer, marketing vice president of International Direct Response, Inc., in Wayne, PA. "Most samples tend to fall into the one- or two-ounce range," he says, "but we've handled seven-ounce dog food samples and others as small as one-quarter ounce."

American Express has used IDR's Catalog Package Sampling Program to deliver credit card applications to prospective customers since 1992. The program has helped Amex "secure a strong position in alternative media," says Gabriele Loebbert, senior marketing manager, American Express Travel Related Services Co., New York City.

EFFECTIVENESS

Sending people samples inside a package they have ordered from a catalog company obviously has its advantages. In the most recent Cox Direct study, manufacturers ranked Direct Mail Solo sampling media first in targeting flexibility, new trial, and trade tie-in potential and second in sample security and efficiency at reaching the target. Direct Mail Co-op Programs, which involve more than one manufacturer, ranked first in reaching the target, third in sample security, second in targeting flexibility and trade tie-in potential, and fourth in new trial.

How do marketers track return on investment (ROI)? Often, they conduct post-promotion research surveys, asking consumers about recall of the offer, sample usage, and subsequent purchase of the brand. If coupons are part of the sample package, ROI can be measured by coupons returned. In some cases, success is measured by the "lift," or trial, of the product after the sample drop.

Butler of the Sunflower Group claims that client research and his company's own surveys demonstrate the power of in-home sampling combined with co-marketing with a retailer. One such newspaper pouch drop recently generated 93 percent awareness among targeted consumers, 76 percent recall, and a more than 30 percent trial on the first day, he says. In-store coupon redemption was double the national average.

IDR developed its in-home Catalog Package Sampling Program in 1992 as the result of a test with the maker of a leading analgesic. The client was seeking a cost-effective way to distribute 4 million samples and coupons to its core audience of active adults, age 45-65. The marketing team wanted something different from traditional sampling vehicles, a medium that competitors were not using.

IDR recommended a list of eight catalogs in the apparel, home health products, and housewares categories, all of which were being sent to the desired target audience. The two-month sampling promotion resulted in "very high" coupon redemption versus other sampling vehicles, says IDR's Guyer.

The power of catalog sampling is in its ability to target, says Guyer, since the method takes into account not just the demographics but also the lifestyle characteristics of sample recipients. IDR works with about 1,000 of the 10,000 catalog mailers in the U.S. on targeted direct-to-home sampling.

Clients are offered profiles of various catalog-shopper databases from which to chose. For instance, a company seeking a male, sports-oriented audience might choose to sample in packages shipped by Cabela's Outdoor Catalog. Seasonal variations in catalog shipments are taken into account. Clients get detailed demographics on the catalog shoppers, including age, income, marital status, lifestyle, home ownership, and professional or job-related statistics.

What's in it for the catalog company that supplies the sampling vehicle? Samples give consumers an extra treat when they open their merchandise, thus giving the cataloger a "value-added product or service" designed to appeal to its target audience, Guyer says. Also, since IDR and its clients are paying part of the freight, the catalog company reduces postage costs.

Duplication of consumers receiving the sample is not a factor unless the user takes a full year of catalog package shipments. That is rare, because most clients regard sampling as a short-term promotion that hopefully will produce an immediate impact on sales.

INTERNET FUELS GROWTH

When Cox Direct asked consumers about the types of online promotional activities they would find useful, the ability to sign up for product samples online ranked first, chosen by 44 percent of respondents. Local store coupons/other offers were sought by 36 percent of online shoppers, 32 percent looked to receive grocery manufacturer coupons, and the same number wanted to learn about local/community events. Exactly one in four were interested in obtaining product recipes and entering sweepstakes online. The only downside of the research is that just 20 percent of consumers surveyed had current access to the Internet.

Delivering samples to consumers in catalog packages seems likely to increase with the growth of e-commerce on the Internet. Research released in 1999 by the Direct Marketing Association shows that catalogs and the Internet generated consumer sales of about $54.3 billion in 1998. From 1999 to 2004, catalog sales to consumers are projected to rise 5.7 percent to more than $75 billion, while Internet sales will jump 51.3 percent to more than $31 billion. All the more opportunity to enclose samples in packages being shipped to designated groups of consumers.

STATISTICS

Sampling by companies is close to a 20-year high, the latest Cox Direct survey of grocery manufacturers and consumers shows. About 85 percent of manufacturers reported offering samples of new products in 1997, compared to 86 percent in 1996, the highest percent usage recorded since the study began in 1978. More than three of four manufacturers (78 percent) sampled established products in 1997, compared to 90 percent in 1996, the all-time high.

The effectiveness of sampling in general and in-home sampling in particular is supported by other research findings. The Yankelovich Monitor 1998 ranked "a sample package or free trial size" at the top among "inducements to try a new product or brand." In 1998, 64 percent of the consumers surveyed reported responding to a free package or trial size. Women were more tempted by samples than men. Consumers aged 16-52 were equally drawn to samples, with 66 percent responding to these promotions. Above age 53, response to free samples or trial sizes fell to 60 percent.

In the Cox survey, 43 percent of consumers strongly agreed that they "would consider switching brands if they liked the free sample," and 41 percent strongly agreed that "they often became aware of new or improved products through samples or coupons." In addition, nearly a quarter of respondents said that receiving a sample at home is "very important" (23 percent) or "somewhat important" (50 percent) in their brand decision.

Direct mail continues to be the primary source by which consumers receive samples, according to the 20th Annual Cox Direct Survey of Promotional Practices. More than three of four consumers (78 percent) receive samples by direct mail, the survey, released in 1998, found. Seventy percent of the respondents preferred to receive samples by mail, rather than at the store (39 percent), or with the newspaper (30 percent)

Manufacturers reported allocating 18 percent of their consumer promotion budget to sampling programs in 1997, a higher level than in 1996 (13 percent). Almost all manufacturers expected their overall sampling budget to increase (49 percent) or remain the same (40 percent). Higher budget increases were anticipated for co-op (40 percent) relative to solo (25 percent) sampling.

CASE HISTORIES

L'Oreal. A dedicated sampler in the cosmetics field, L'Oreal has stepped up its in-home efforts. Using IDR's Catalog Package Sampling Program, it targeted teens with three major promotions. Lisa Dallenbach, consumer promotion manager at L'Oreal's retail division in New York City, says samples of L'Oreal's Studio Line Mega Gel hair styling gel were included at various times of the year with shipments from the trendy teen catalogs Delia's and Moxie Girl.

"We try to time promotions for back-to-school or the holiday season," Dallenbach says, noting that teens are hard to find in the marketplace. Using catalog shipments provides the perfect fit in terms of the product image Studio Line is trying to convey, because the type of merchandise the catalogs market appeals strongly to the brand's target audience. That just about guarantees that the young women will try the product.

Helene Curtis. In 1997, Helene Curtis used a catalog sampling program to promote its two-year relationship as an official sponsor of the National Football League. Each package of NFL apparel that went out from the Sports Illustrated catalog contained a sample of HC's Degree deodorant along with a card referencing one of the NFL rookies who were part of the brand's TV ad campaign. "This was a natural fit," Sangita Woerner, Degree assistant promotion manager at the time, told Promo magazine. Woerner, now associate brand manager for Thermasilk, concluded that, "You just wouldn't have got that audience with a newspaper insert."

Bayer Consumer Products. Instead of sending out product samples in catalog packages, some marketers just send promotional material. That's what Bayer Consumer Products did in the spring of 1999 when it packed brochures and coupons for its Bactin and Campho-phenique antiseptics inside packages shipped to camping and outdoor sports enthusiasts. The promotion "gave us a unique and cost-effective way to reach a very targeted audience," says Tish Musell, consumer promotion manager of the Morristown, NJ, concern. "We are happy with the vehicle. It gives you a good idea of the recipient's profile." Putting product literature in catalog packages approximates a solo direct mail program, she says, and can be carried out at a much lower cost-per-customer.

ASSOCIATIONS

Promotion Marketing Association's Product Sampling Council is an umbrella group for sampling users and distribution companies that often speaks for the industry about the benefits of sampling as a promotional tool. Members of the council will meet during PMA's Update 2001 Conference (see below). Call 212-420-1100; go to http://www.pmalink.org/.

CONFERENCES AND TRADE SHOWS

For a list of Industry Events, go to #9510, Calendar of Industry Events.

KEY RESEARCH

Cox Direct 20th Annual Survey of Promotional Practices (1998) is divided into three sections. The consumer section shows consumers' preferred sources of product samples and how they are affected by sampling programs. Sections devoted to Packaged Goods Manufacturers and Grocery Retailers analyze respondents' usage of various types of promotions. 80 pp. $215. Call Sandy Paree at 800-825-7255.

Yankelovich Monitor is an annual survey of 2,500 American adults that tracks values, beliefs, and lifestyles. Available only to clients and partners of Yankelovich Partners, Inc., a marketing research and consulting firm. Call 203-846-0100.

The Second Annual Survey of Consumer Preferences for Product Sampling reports on consumers' preference for various sample-delivery channels. Results are segmented by gender and lifestyle. 250 pp. $175 from Target Marketing & Research, Inc. Call 516-271-1130.

The 1999 Annual Report of the Promotion Industry was published in the July 1999 issue of Promo magazine. It has statistics on product sampling as well as other promotion devices. $10. Call 888-892-3613; go to http://www.promomagazine.com.

Promo magazine's 2000 Sampling Chart, published as a special advertising insert in the September 1999 issue, provides a comprehensive listing of 250 sampling programs available in 2000, including dates of distribution, how the samples are distributed, and cost parameters. $10. Call 888-892-3613; go to http://www.promomagazine.com.

Economic Impact: U.S. Direct Marketing Today, conducted by the WEFA Group for the Direct Marketing Association, was published in May, 1999. Statistics and projections track catalog, interactive, and retail sales, along with advertising expenditures and industry employment. $49.95 DMA members, $74.95 nonmembers. To order, go to http://www.the-dma.org and click on Bookstore.

DMA Statistical Fact Book '99. $105.95 DMA members, $165.95 for nonmembers. To order, go to http://www.the-dma.org and click on Bookstore.

BOOKS

Advertising and Promotion: An Integrated Marketing Communications Perspective, by Michael A. Belch and George E. Belch, analyzes the role of individual communications media in an integrated marketing program and discusses objectives, budgeting, and evaluation. 1997. Irwin/McGraw-Hill. $87.80, through Amazon.com $79.02.

Sales Promotion Essentials: The 10 Basic Sales Promotion Techniques and How to Use Them (Third Edition), by Don E. Schultz, William A. Robinson, and Lisa A. Petrison, shows how sampling and nine other techniques work. Gives examples of how marketers can plan for and use these techniques and illustrates the real-life benefits and drawbacks of each. 208 pp. 1997. NTC Business Books. $19.95, through Amazon.com $15.96.

PUBLICATIONS

Advertising Age, weekly, is a source of marketing, advertising, and media news and analysis. $119/yr. Call 888-288-5900; go to http://www.adage.com.

Brandweek, weekly, covers sampling as part of the marketing mix. $140/yr. Call 800-722-6658.

Brand Marketing Magazine, monthly, covers sampling programs in addition to other marketing techniques. Qualified brand marketers buyers get a free subscription. Call 800-247-2160; go to http://www.brandmarket.com.

PROMO, monthly. PROMO defines promotion trends, presents critical "how-to" information and case studies about promotion, and serves as a meeting ground for companies and professionals in the industry. Free for qualified subscribers, or paid subscription is $65 p/year. Go to http://www.promomagazine.com.

Sales & Marketing Management, monthly, is for executives who want to build sales, stay ahead of the competition, keep up with technology, and market their companies to today's tough customers. $48/yr. Call 800-821-6897; go to http://www.salesandmarketing.com.

Sales & Marketing Strategies & News, published nine times a year, covers sampling in several sections, including Sales Promotion, Media & Brand Marketing, and P-O-P & In-Store Marketing. $49/yr. Call 800-435-2937.

ONLINE SERVICES

http://www.BuildingBrands.com has been set up by a small team of long-term marketing professionals which offers information on building brands that build business. The site covers every aspect of brands and brand building, including: brand strategy, marketing, communications, and customer relationship management.

DirectLINK Online provides marketers with access to the Direct Marketing Association's extensive database. Available to DMA members only. Call 212-768-7277; go to http://www.the-dma.org.

PromoXchange, a service of Promo magazine, helps marketers create and post proposal requests to which suppliers can respond. The Promotion Planning Guide at the site provides an extensive step-by-step procedure for defining the strategies and tactics best suited for your marketing objectives; includes articles and case studies. Go to http://www.promoxchange.com; call 203-358-4166.

Promotion Marketing Association's Industry Report is available only to members. Go to http://www.pmalink.org/.

RELATED SMN ARTICLES

For information related to in-home sampling, see #9110, New Product Launches.