RAPP COLLINS: LABOR OF LOVE

Who says you can’t have a hard nose for business and a heart of mush? Ask any of the designers, copywriters, marketers or other Rapp Collins staffers who vie to work on the agency’s pro bono program for Children’s Memorial Hospital, and they’ll swear that it’s possible.

Three years ago, the Chicago-based DM agency began contributing hours to the pediatric hospital’s holiday card program. Based on artwork done by children during their stay, the cards are sold through a catalog program that has become a significant source of donations for the nonprofit organization. In fact, revenues have more than quadrupled since 1996.

“Honestly, we fell in love with the project,” says Sharon Lowe, vice president/group director for Rapp Collins. “But we knew from the start that it could be marketed smarter than it had been in the past.”

“The difference between the way we did things before Rapp Collins and now is enormous,” says Jo-Ellen Weiss, director and founder of the Children’s Art Auxiliary. In the program’s first three years, from 1993 to 1995, the hospital promoted the cards without fully understanding the impact on the donation profit, she says. “For example, we were offered a pro bono ride-along with a catalog that mailed in the Chicago area. We were delighted to participate, but we ended up losing about $40,000 because the return couldn’t offset our flyer printing costs,” she says. “When we joined up with Rapp Collins, they really educated us on the return we could and should get for our dollars.”

The returns add up, in part because the client is a nonprofit entity. In addition to contributing over 2,500 hours themselves, agency staff negotiate pro bono work by printers and suppliers of paper and lists, as well as contributed space for print ads that drive the campaign. The result: 181,000 cards sold in 1996, nearly 500,000 cards sold in 1997, and a preliminary estimate of 900,000 cards sold during the 1998 season.

“We’ve learned things each year,” Lowe says. “And we find ways to make the donations work harder, because we realize that every dime wasted is a dime wasted for the kids.”

While Lowe and her staff may be passionately committed to the Children’s Memorial account, it does present challenges. While children from all over the world come to the hospital, it primarily serves the Chicago region, so the annual campaign has limited geographic scope. In addition, when they came on board in ’96, they also discovered the best market for the product was being missed. Previous agencies had tried selling to hospital supporters and households. But when they reviewed Weiss’ sales records, Lowe and account supervisor Lydia Gaston discovered the average order by a corporation buying from the catalog was about $600. The average household bought about $100.

“Corporations purchase about five times more than private individuals, so it was obvious to us that our best strategy was to go after the business-to-business market. But it’s a hard target to pin down,” Gaston says. “That buying decision could be made by a CEO, it could be a vice president, it could be a human resources director, it could be an executive secretary.”

Rather than use telemarketing to chase down elusive decision-makers, and with catalogs costing 75 cents per prospect, the agency advised Weiss to cast a wider net at a lower cost per contact. “After the 1996 selling season, we developed a strategy that made people come to us-and that’s where print came into play,” Lowe says. In the past two years, the agency has solicited free ad space from Crains Business-Chicago, Chicago magazine, and regional editions of USA Today and Time magazine. In 1997 alone, the Rapp Collins media department was able to woo some $187,000 in media donations that steered prospects to the hospital-based telemarketing staff. “We send the publishers thank you notes, a box of the cards and some of the art done by the children, all to reinforce the value and appreciation for their donation,” says Gaston.

To bring costs down further, the agency initiated a two-step mailing program in 1997 that consisted of an actual Children’s Memorial holiday card sent to a corporate contact, printed with an invitation to either place an order, receive a catalog or visit the program’s Web site. Mailings are sent to lists such Crains Business Chicago and the Bar Association of Illinois.

For 1998, Rapp Collins launched a Web site for the program. “We didn’t think it would be a primary sales vehicle because of where the Web is right now and because this product has regional appeal,” Lowe says, “but we see it as another way to lower our prospecting costs.” While the current version only allows catalog requests, secure transactions should be possible by the 1999 buying season, she says.

Both Children’s Memorial and Rapp Collins are delighted with the results. The database has tripled to about 3,500 businesses and households (2,000-plus are corporate accounts). More importantly, Weiss says, they are close to their goal of turning over 20% of profits (some $200,000 annually) to family services programs at the hospital. And that’s a healthy return on investment by anyone’s measure.