Christmas card sales have the potential to generate substantial additional revenue for charities. This year many organisations are reviewing their plans and considering new methods to maximise their profit margins.
However, they face stiff competition from non-charity cards and it can sometimes be difficult to negotiate favourable deals with hard-nosed commercial operators.
Oxfam, which has the advantage of having its own chain of shops, says it made £2.6 million from card sales last year and is hoping to build upon that success.
"Christmas card sales have been really successful. They are one of the most successful parts of our new products business,
says Anne Harvey, marketing manager for Oxfam's UK trading division. This year, Oxfam is simplifying prices so they are easier for customers to remember. The prices are also going to be displayed more clearly and the number of designs has been reduced to save costs. There will be a traditional range of cards and a more contemporary range. "Most people don't necessarily want to say to their friends, 'Happy Christmas from Oxfam'. They want to feel good. They don't necessarily want a very Oxfam specific or worthy image on it,
Oxfam has carefully researched its card-buying audience and found that the majority of its customers are female, in their mid-thirties and have children. As well as modern designed cards, Oxfam is going to be offering them contemporary gifts such as beaded boxes and attractive photo frames.
"We have tried to make them modern and competitive.
Harvey says that effective local PR carried out by the shops can make a difference as well.
"We hope the shops will be doing their local PR. A lot of them have got very good links with schools in their area. They might be doing talks in schools or they have links to groups such as the WI."
Charities such as Oxfam have big advantages because they have their own shops and control the margins on card sales. But the average charity fundraising margin on Christmas cards sold through high-street outlets can be between 9p and 20p a card. The Charity Christmas Card Council (now rebranded as 4C), donated £335,000 to charities from its own card publishing activities last year. It says that organisations have to be careful about how they approach deals with high-street retailers which are likely to dedicate the most space to products which deliver the best returns for them. "You have to be realistic and you shouldn't get into bed with a commercial operator for less than 10p of the card price,
says Neville Bass, 4C's chief operating officer. "Everything we do is sourced by us and published by us. The charities are not bearing any risks. We bear all the commercial risks."
Bass says that design has a critical impact on the commercial success of charity Christmas cards. "It's design, design, design. It's design first, design in the middle and design last."
The Charities Advisory Trust, which runs the network of Card Aid charity shops, pools all the card printing orders of the different charities it works with in order to help bring costs down. Director Hilary Blume says there are a number of basic guidelines charities can follow to improve their margins. "Don't over-order, you can always re-order. Your loss is your leftover stock. Only order the quantity you can sell."
She says that Christmas cards are not necessarily appropriate for all charities. Smaller organisations should not do it just because it is something charities do, she argues. For those charities producing cards Blume says it is good to have a choice. "Have a range of cards to suit a range of people. You want to have a choice of designs, sizes and types."
She thinks that charities have to develop better negotiating skills with commercial operators and says they should not underestimate the value their association brings to a card. "The real problem is that charities allow themselves to be used by commercial partners and strike very poor deals. You get examples where charities receive 3 per cent of the card price. They should not agree to that. It's selling their name too cheaply."
Shelter strikes deals directly with card publishers and retailers but says it can be difficult to negotiate a good price with card partners.
"They know how attractive the deal is. It's completely risk-free. You are not in a particularly strong position. If you say 'no', you know they could find lots of other charities keen to do it. But you have to be firm about the minimum percentage you will accept,
says Jenny Greenfield, deputy director of commercial operations at Shelter Trading. Marks & Spencer is one of Shelter's retail partners and last year the charity raised £73,000 through the tie-up.
"We would always look for 10 per cent of the card price. We don't always get that. It does vary,
she says. Greenfield adds that selling the cards in high-street shops is not just about money. It's also an opportunity to raise the profile of the charity since so many people browse through card racks at Christmas time. In order to negotiate good deals with retailers or card publishers, she says it's worth pointing out to them that their public image will suffer if they come across as stingy. "Try to persuade companies that it is in their best interests to look as generous as possible,
Many charities are ensuring that they make their cards available over the web this year. For smaller charities which lack marketing support, the web can be a way of reaching new audiences and unlike traditional shops, online services are open all day and night.
William Ruffman, managing director of charitycards.co.uk, says the business sold 12,500 packs of cards through the site last Christmas and this year he is hoping to improve on those figures. There are 40 charities on the site this year, compared with 30 last year. Charities which place cards through the site get 66 per cent of the retail price and any consumer visiting the site is clearly informed on the homepage about the amount of money passed on to the charities when they buy them.
This year Ruffman will be more selective about the types of cards he will take on the site. "Charities have to try and choose something they think is going to sell. They don't always like taking risks. Normally, they pick what sold well last year. Few charities choose radical high-street designs,
However, charities still remain to be convinced that the web is in a position to deliver large volumes of sales. "It's not enormous. But it will obviously develop,
says Blume. She adds that it is important when negotiating any deals not to overlook how Christmas cards are able to help causes. "They can make a huge difference to people's lives. People say, 'It's just a Christmas card'. But the profits from a pack of cards can pay for a cataract operation. It really matters."
CASE STUDY - AGE CONCERN FINDS STYLISH DESIGN IS KEY
Charities such as Age Concern are in a strong position to sell Christmas cards because they have their own established network of shops. Last year, Age Concern sold 54,500 packs of cards, an increase of 30 per cent on the previous Christmas, and this year it hopes to do even better.
So, how does it plan to achieve this? "We are thinking of doing posters to attract people's attention to the fact that the cards are on sale in the shops,
says Anja Brown, Christmas card product manager at Age Concern Enterprises. As well as commitment from the shops, the charity puts the growth of its card sales down to the quality of the designs. "This is our second year with a new supplier. We have to compete with the high street,
Brown is confident that the quality of the cards this year will boost revenues. The profit margin for Age Concern groups and shops is 40 per cent and last year about £55,000 was generated from sales. "The card designs are colourful. We don't want to be seen as a cheaper version of the high street. You have to make people want to buy them not because they are supporting a charity but because they like them."
The charity is also planning to continue to take advantage of the internet as an alternative sales channel. A selection of Age Concern cards will be available from the web site of the Greetings Card Company (www.charitycards.co.uk).
And there will be a direct link from the Age Concern web site. Last year the charity generated a few thousand pounds from the online shop but it is hoping for an increase this year. "More and more older people are getting used to the internet. It's an additional way of reaching new customers,
Brown points out.
Age Concern cards are also sold at about 50 Cards for Good Causes shops across the UK and Brown says this is an opportunity to reach a different kind of audience. "You can also sell your cards at a slightly higher price than you can at Age Concern shops because the audience is different."
By linking with the Good Causes network, Age Concern is able to break into traditionally wealthy areas such as Sloane Square in London where it does not have any of its own charity shops.
Traditionally, the corporate market is a good source of support for charities.
Through research Age Concern has discovered that certain private individuals in this sector are responsible for buying large numbers of cards and so it is developing a catalogue this year which is aimed specifically at the individual donors. "This is a new route. The images will be less corporate and will be closer to designs on the high street,
CHRISTMAS CARDS MAKE MILLIONS OF POUNDS FOR ORGANISATIONS
The charity Christmas card market generates a considerable sum of additional revenue for charities each year. In the UK, the sector is valued at about £320 million and around one in three cards are sold in aid of good causes. This generates annual donations of about £34 million for charities.
Packs of cards sold through either high-street retailers or charity shops are very popular with the consumer market although bad publicity relating to the level of royalties paid to charities through this distribution route has led to some criticism and cynicism. The royalty paid can vary from 1p per pack to 25p per pack, depending on the individual contract entered into by the charity.
The corporate market is an important one for charities. The average value of a corporate card order is several hundred pounds. If this sale is achieved for example through one of Christmas card design group CCA's charity branded direct mail campaigns, the charity receives 40 per cent of the retail value of every card order received. And there is no cost risk for either the production of the mailing packs or the cards themselves.
But the corporate Christmas card market is fiercely competitive. Many companies receive up to 10 charity Christmas card brochures in one season.
Research commissioned recently by CCA revealed that design, quality of card and price were the most important factors considered by companies when they are choosing their cards. The corporate market for charity cards dipped slightly last year. The CCA puts that down to 11 September, the economic consequences of the outbreak of foot and mouth and a general slow down in the economy.
In spite of the early hype over the internet as an alternative channel, there is no evidence yet that the web can deliver huge volumes of card sales. However, the channel is still developing and the convenience of being able to buy cards from the comfort of your own home could possibly work in the internet's favour this year. Furthermore, if charity web sites themselves become stronger and attract more traffic then their links to online shops could enjoy higher conversion rates.
A strong feature of the market in recent years is the move towards more contemporary designed cards. Oxfam believes contemporary card designs could lift its sales. Anne Harvey, marketing manager at Oxfam's trading division, says it is important for charities to take a market-led approach. "Try and provide what the customers want rather than relying upon the customer buying the card just because it's for a charity.