CHRISTMAS CARDS: Season's Greetings

Robert Gray

The fact of the matter is that corporate Christmas cards will never be a major strand of charity income. Yet even in today's tough economic climate, the revenue they generate is not to be sniffed at - rather like a red nose on a reindeer.

CHARITY CARD SUPPLIERS

The Almanac Gallery

Cost: Packs of 10 cards income to charity from 97p. Personalised cards to corporate market income to charity varies from 10p to 40p per card.

Special features: Opportunities for sales online and through retail at www.cards2order.com.

Previous clients: Royal National Lifeboats Institution, National Autistic Society, Mind and The Stroke Association

Tel: 020 7610 6066 Email: charityservices@almanac.co.uk

The Greetings Card Company

Cost: For charity packs, the organisation which owns cards sets the retail price. The Greetings Card Company returns 66 per cent of card retail price after VAT, out of which the charity pays for the cards. For Greetings Card Company produced packs, the customer selects the charity to benefit. The charity then receives 20 per cent in royalties after VAT. For personalised cards, the prices vary depending upon quality of base card and finishes applied to it.

Previous clients: Not available

Tel: 0191 261 6363

Email: info@charitycards.co.uk

CCA

Cost: Cards from under £1 to in excess of £2 at retail.

Special features: Offers various ways in which personalised cards make donations to charity, including purchasing via agents naming a charity - the donation is 9p per card. It also offers an option where a basket of charities can be chosen and each receives a share of the 9p donation.

Previous clients: Age Concern, NSPCC, Save the Children, the Cystic Fibrosis Trust and Barnardo's

Tel: 01772 662995 Email: tim.mckeogh@ccagroup.co.uk

HOW TO BOOST CORPORATE CARD SALES

- Keep your corporate database clean and up to date to maximise response rates when sending out catalogues.

- Market cards as a customer relationship management device.

- Make sure the designs you offer are of sufficiently high quality to appeal to what is a demanding audience.

- Be flexible. If a client wants something done differently from a standard format see if you can accommodate that wish, as long as the charity can still make a decent margin.

- Stay alert for opportunities all year round. Some clients like to order early, for others it is a mad dash a few short weeks before Christmas.

- Customer service is important. Keep clients informed on the progress of the job, step by step.

- Follow up in the New Year to establish what feedback the corporation received to its cards. This kind of attention to detail and customer care can help build loyalty in an area that is notoriously fickle, given that many corporations like to rotate the charities they support on a regular basis.

The corporate Christmas card market has fallen steadily in recent years. But with the right product and planning, organisations can still achieve impressive returns. Robert Gray reports.

What do you want for Christmas? It may seem rather early in the year to pose such a question but many charity trading managers already know what they'd like: a surge in corporate spending.

As forward planning begins for the festive season at the end of 2003, many are wondering whether it will turn out to be a cracker or a turkey.

The economic downturn has shaken confidence in the private sector and many companies have cut back on what they consider to be the discretionary parts of their marketing spend.

The corporate Christmas card market, which boomed during the 1990s and into the year 2000, has declined over the past two years. Clearly, this is a blow to charities as corporate cards can be a useful source of revenue.

Figures from trade body the Greeting Card Association show that around £300 million a year is spent on Christmas cards in the UK. Of this, approximately £100 million goes on charity cards. The majority of this £100 million is spent by consumers in shops or via mail order or online catalogues.

Additional research by card publisher The Almanac Gallery puts the annual corporate spend on Christmas cards at around £30 million.

"The market does appear to be falling away," says Jonathan Chambers, head of trading at The Blue Cross. "The soundings we have taken would appear to indicate that there has been a trend of decline."

"We think it's declining," concurs Rod Davies, sales and marketing director of CCA Group. "And there are a number of reasons for it. The economic situation is one, and post-11 September there has been a bit of charity fatigue."

CCA, formerly the Christmas Card Association, has an annual turnover of £27 million derived from sales of ordinary greeting cards and personalised cards - around 70 per cent of the latter are bought by corporate customers.

Last year, it gave cheques to charities totalling £750,000.

While the 2002 figure is still a substantial sum it is down about 10 per cent on 2001, which itself was down about 20 per cent on 2000. "It's a significant loss of income for charities," says Davies.

The financial services sector, traditionally a major spender on cards, has been hit hard by the economic downturn and in particular stock market volatility. The IT, travel and recruitment sectors have also taken a pummelling over the past couple of years. Spending on corporate Christmas cards is just one of the areas where many companies have cut back.

Precise sector-wide statistics are hard to come by, but the broad consensus among charities and card publishers is that the market fell by about 25 per cent in 2001. For last year, the decline is understood to be around 10 per cent. Some individual charities of course bucked the trend.

"It has been tough but we had a better year in 2002 than we did in 2001," says Julia Evans, mail order and affinity products marketing manager of NSPCC.

In 2001, NSPCC saw its turnover from corporate Christmas cards contract by a painful 24 per cent. In 2002, however, turnover increased by 21 per cent. Not enough to return to the income levels it had in 2000 but at least a move in the right direction.

Corporate Christmas card catalogues are an important source of income for Macmillan Cancer Relief, raising about £100,000 for the charity in 2002. This equates to just under 10 per cent of its total Christmas trading income.

"Last year, we saw a marked increase in the number of corporate supporters who wanted to bypass corporate catalogues and approached us direct for significant quantities of overprinted cards from our Christmas catalogue," says Lisa Nunn, trading manager of Macmillan. "We sold approximately 200,000 of our most popular card, many of these personalised for corporate orders."

Macmillan is not alone in seeing a rise in corporate supporters requesting options not in the corporate card catalogue. What this shows is that charities need to be flexible and cover all the options: from participating in schemes run by the card publishers where they are one among a basket of charities that benefit, to having a corporate catalogue, to being able to offer an a la carte solution if that is what a corporate buyer wants (and as long as it can be done profitably).

There is dismay in some quarters at initiatives such as Crisis' The Christmas Card Challenge in which companies pay money to Crisis to appear in the pages of the Financial Times with seasonal messages for their clients and stakeholders. While Crisis is not calling for corporations to stop sending out Christmas cards, some critics feel that this is the implied message and that it is causing some damage to corporate card orders.

Darryl Williams, chief executive of the card publisher The Almanac Gallery, admits to feeling angry when he sees announcements from chief executives in which they reveal they are not sending out cards but are making a charitable donation instead. Setting aside questions of whether the size of that donation would be comparable to the amount a charity would receive if Christmas cards were sent out, Williams asserts it is outrageous to ignore the powerful business impact that corporate cards can make.

"Let's not confuse giving to charity with the fact that a card is a customer relationship management tool," says Williams. "It's interesting that modern management speak pays lip-service to customer relationship management, yet so many companies, especially financial institutions, forget about their customers when times get a bit tougher."

"What else can you do to thank a company for its business, wish them a Merry Christmas and remind them that you exist?" asks William Ruffman, managing director of The Greetings Card Company.

It's a fair point. Maybe charities could do more to persuade corporates that sending Christmas cards is an act of enlightened self-interest as much as it is an act of philanthropy. This should not be an alien concept.

After all, the best corporate social responsibility programmes are those that are closely aligned with a corporation's goals and help to build business as much as they contribute to making the world a better place.

In an age of perpetual connectivity, where email and mobile phones bind us together digitally, buyers and sellers are in touch with each other all the time. Yet the fact that this has become the standard way in which business is conducted makes it mundane.

Sending a Christmas card adds a human touch to the relationship, bringing a caring face to customer relationship management. Surely this has to be good for business? Corporate Christmas cards should be presented by charities as a commercial tool first and foremost, albeit one that benefits good causes in the process.

Another factor that may be contributing to the current poor performance of the corporate card market is public opinion that cards do not offer a good return on investment for charities. Negative stories in the media may have discouraged some corporations from going down this route.

"What muddies the water is the public's perception of what is good value for a charity," says Sheila Morgan, trading manager of Save the Children.

"We could do without some of the adverse publicity that the charity card market gets," agrees Evans.

Again, arguably charities could do a better job of explaining to the wider world that it is not possible to take a huge chunk of the sales price as profit. Corporate buyers would not stand for inflated prices in the same way that the man in the street would not pay massively over the odds. Cards may be a low margin source of revenue but when they are sold in high volumes, they can still deliver healthy sums for charities.

"Even if a particular scheme is perceived as being low income per card or per pack, it's still additional income for us," says Laurence Irving, trading manager of the British Heart Foundation.

Electronic Christmas cards may conceivably be taking business from the direct mail variety but evidence to support this is thin on the ground.

In fact, new-media is likely to be more of a help than a hindrance to this traditional communications technique.

Online catalogues allow corporate buyers to find what they want quickly and efficiently and the leading card publishers and charities have embraced the internet eagerly. The Greetings Card Company, for example, has built "microsites" for 23 out of the 40 charities that work with it. Moreover, the company claims that 99 per cent of its card sales are transacted online.

Advances in digital printing mean that logos and company details can be incorporated into card cover designs if desired - as well as simply inside the card - at relatively little additional cost. This massive potential for personalisation should be a major incentive to corporates looking to make their mark with customers.

Yet the tendency to play safe remains. "What most corporations are looking for in a card is something that will be inoffensive to everyone, so that they don't have to worry about who they send it to," says Evans.

The standard of design has definitely improved in recent years, which is a good job as this is one of the main factors in the purchasing decision.

If anything, in keeping with the more subdued business mood of the downturn, grandiose and bombastic designs have slipped out of favour.

In many cases, charities would like to use cards as an entry point to building deeper relationships with corporate supporters. Often, though, they are frustrated because of corporate attitudes.

"The difficulty with charity Christmas cards is that companies want to be seen to rotate their support among charities," says Morgan. "And a lot of companies want to involve their staff in the decision-making process."

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