Building and Using a Business List (858 words)

by Jack Schmid

In the folklore of catalog history, there is a story that may be apocryphal, but fascinating just the same. It's a story of Harry and David, today's leader in the food-by-mail field. In the height of the great depression, Harry and David's fruit business faced impending doom. In a last ditch attempt to save the company, the owners presented their fruit baskets to businesses as a gift idea. The idea worked and the story goes that it not only saved the company from ruin, but helped focus Harry and David on a new course—mail order and cataloging to businesses and consumers.

The Food-By-Mail Market

There is a message in Harry and David's story for today's food and gift catalogers. Food mailers don't like to admit it, but they are not in the food business. They're in the gift business. Today this market segment, according to the "1997 Guide to Mail Order Sales" published by Marketing Logistics Inc., includes 620 different catalogs or direct marketers and produces revenues in excess of $1.76 billion. There are a number of major players, including Harry and David, Omaha Steaks, HoneyBaked Ham and Hershey Foods, whose names have become brands unto themselves. Every sub-segment—nuts, candy, fresh meat, baked goods—has its leaders. These food mailers have a number of things in common:

1. Their businesses are dramatically oriented to gift giving, especially in the fourth quarter of the year. The business is so seasonal, that someone has coined the phrase "5th quarter"—the period between Thanksgiving and Christmas—when an exceptionally high number of orders are processed.

2. There are a lot of small companies which are being consolidated.

3. Most prospecting is oriented to consumers, not business customers. Little attention is typically spent thinking or worrying about businesses, either prospecting for new ones or segmenting existing business customers from consumer customers.