Helping Costco Attract New Members Through Direct Mail

The story

Costco is a multinational wholesale cooperation with 29 warehouses in the UK and 105 million members across the globe.

Ranking in the top ten largest retailers in the world, Costco operates on a membership only warehouse business model, by offering its members low prices and excellent deals on household brand and private label products across a wide range of merchandise. This in turn generates high sales and swift inventory turnover.

To keep members engaged and build communities, Costco has a monthly membership magazine, Costco Connection. This is sent to their members' houses and is packed full of recipes, new products and community information.

Our solution

Working with Costco and RM it was decided the best way to attract new members was by crafting a show stopping direct mail marketing campaign that targeted a similar audience using their database.

In order to reinvigorate old members who hadn’t engaged with the brand, we sent personalised direct mail pushing them to re-engage with Costco.

We strive to reduce our impact on the environment and make our business as sustainable as possible. This is why Costco were the first business to move their magazine to Paper Wrap, a paper-based alternative to polywrap that’s fully recyclable, commercially viable and a cheaper solution.

The brains behind the business

If a membership and subscription business wants to increase their sign-ups and keep current customers engaged, they need to utilise their data. At Sorted, we love data - it plays a critical part in what we do. We knew that partially addressed mail would garner the most success, so we worked with Royal Mail to target new customers without needing their personal data.

Using Costco’s existing database, we used postcodes that were rich with Costco’s existing customers and targeted prospects in the same area. We then used geo-demographic targeting software to identify new postcodes that were similar to ones Costco were already targeting - we sent mailing to half a million people door to door for three months, and did a cut out mailer door drop over three months.

Each mailer required a removable membership card that prospective customers could remove and use to register an account. We were involved from campaign concept to completion, and felt a die cut campaign would give the best results possible.

In order to optimise results, we tested call to action and strapline placements in months two and three, to see which mailers garnered the most sign ups.

In order to re-engage existing customers and get them to renew their membership, we sent out 150,000 print and lasered mailings with print envelopes, base stocks and inserts every month for many years. This is all managed and machine enclosed in our factory.

Every mailer had either a scannable QR code or trackable URL so that we could successfully report on results and track ROI.

What the Customer Says

“Sorted has an excellent understanding of our business, member data and target audience, allowing them to craft cost-effective mailings that make an impact. We’ve seen significant savings year on year using Sorted as our direct mail supplier. ”

Sue Knowles - Marketing Director - Costco Wholesale UK Ltd