Valpak, the deliverer of the Blue Envelope of coupons to millions of households each month, will reveal a daily deals e-mail newsletter and website in November. Kim Dominguez, director of marketing at Cox Target Media, which owns and operates Valpak, explains to Direct Marketing News how the direct marketing company is navigating the switch to digital marketing.
Direct Marketing News: The Blue Envelope is something that many Americans recognize. However, over the last year, mobile and digital coupons have become more popular. Valpak appears to be trying to address that consumer shift with new mobile apps this year and now a daily deals site. Can you explain how this transition has played out at the company?
Kim Dominguez: It’s very exciting. The blue envelope will continue to be our flagship brand, but what’s exciting is to expand that customer base and provide savings to customers when and where they want it and that’s what is driving our strategy.
DMN: ValpakDeals.com launches November 2010 in Long Island, NY; Omaha NE; New Haven, CT; and Las Vegas. Why these cities and where will you expand next?
Dominguez: We chose those cities based on our relationship with our franchise dealers and the strength of our brand in those marketplaces. It also gave us a good mix of small and large cities, so we could translate those learnings into our expansion plans.
I’d rather not say where we’re going next yet.
DMN: The mobile coupon space seems to get more crowded each day from Groupon to Living Social. What types of expertise does Valpak bring to the table? What type of insight is guiding your team?
Dominguez: Our competitive advantage is our brand. We’re known for our savings. We like to think we’re the leader. With respect to the deals site, it provides us another opportunity to gain share of audience.
We’ve done expansive research to understand the daily deal sites. We built a daily deal matrix that puts deals in four quadrants: deal staples, deal trials, deal aspirationals and deal sensibles. We segmented the market to find the sweet spot of who’s being underserved. It has a tremendous amount of research behind it.
DMN: The number of coupons that Valpak mails still dwarfs those it sends through the mobile couponing app platform. When do you expect mobile couponing to catch up to mailed offers?
Dominguez: If you look at the trends of mobile marketing, it is growing in leaps in bounds. I feel as though we’ll parallel the marketplace, and I think we’ll pace with the market.
DMN: What types of your clients are most interested in mobile components? Are there some verticals that prefer mail?
Dominguez: With our SMS product being launched October 24, they’re integrating mobile offers with their print. Dining is one of our biggest categories and it tends to be popular in mobile offers, too. It’s a high frequency business that tends to find it useful.
Service industry types still enjoy the mail. High-ticket, low-frequency tends to better for print and that traditional piece. I don’t think someone is going to be buy a pool over SMS.
DMN: Has the recession and its lingering effects made coupons sexier to the consumer? Do you think this will have a lasting impact?
Dominguez: I absolutely think this recession will have a lasting effect on coupons. I think consumers find it in vogue to use coupons while spending frivolously is out of fashion. This tradition will stay with us for quite some time.
DMN: Valpak has been in the direct marketing industry for nearly 50 years. How would you counsel other direct marketers to make the transition to digital marketing?
Dominguez: I think the mantra I would use is don’t be afraid of innovation. One of the things that Cox and Valpak supports is … to look for the next new thing so we can meet our consumers where they are. This is really what’s been driving us.
