Saturday, July 09 2011
By Gary Korb
It all began a couple of months ago when my boss, Arthur, sent me a link to an article he had read at Cigars.About.com by Dr. Mitch Fadem, Ph.D. titled, Cigar of the Month Clubs: Is It a Deal or Not?. In his email Arthur suggested I read it and think about doing something for Cigar Advisor on Cigar of the Month clubs. He even suggested a good title: "Why Famous Smoke Shop does not have a cigar club," sub-headed, "Clunkers and Closeouts." Read on and you'll understand why.
In his article, Dr. Fadem offers a brief but cogent narrative of his Cigar of the Month Club experience. Admittedly, Dr. Fadem only joined one club at $30/month to see what benefits there were, if any. Each month he would receive five cigars and free shipping. Following are some of his remarks which answered his question, "The deals sound good, but how good are they really?"
"The first month was great! I got five cigars worth about $40 and a couple of free gifts," wrote Fadem. "One of the gifts was a double bladed cutter, value around $5, and the other gifts were three very expensive cigars, valued at around $20 a piece...which I would never have tried because of the price."
So, for the first month he received $105 worth of products for $30. As Larry David might say, "Pretty good....pretty, pretty good."
The 5-pack Dr. Fadem received in the second month, "was not as good as the first month...I received five cigars with an average price of $6 a cigar..." So, the value of the second month's cigars only equaled his monthly membership fee. Nevertheless, he still felt the cigars were pretty good.
By the third month, the cigars began to deteriorate, as did the value of Dr. Fadem's membership.
"Again, I received five cigars, but now only three were priced at $6 a piece, one at $3 and one was a $2 stinker. That is only $23 in value for $30."
At this point, Fadem decided it was time to hang it up and cancel his membership. To be fair, he pointed out that there are probably better clubs out there, but his experience left such a bad taste in his mouth (you'll pardon the expression), he wrote that he would be "unwilling to try another," and concluded that it's better to choose your own cigars than to have them chosen for you.
* * *
So what have we learned? For his $90 investment, Dr. Fadem received $158 in cigars and accessories (that's the retail value). The cigar store that hosted the club made $90 and was able to unload some unwanted inventory; most likely, as Arthur pointed out above, "clunkers and closeouts." Which brings me to why Famous Smoke Shop doesn't have a Cigar of the Month Club.
About five years ago Famous thought of starting a Famous Smoke Shop Cigar of the Month Club. My assignment was to research by joining not one, but several cigar clubs for three months in order to:
- Get a better idea of how the clubs work, including pricing, extras, etc.
- See what cigars they were sending out.
- Compare which clubs offered the best value for your money.
Like Dr. Fadem, I won't name names, but here's what we learned: All three clubs offered 5 cigars each month and cost from $29.95/month to $49.95/month. The information sheet from one club was very helpful - especially for the newly initiated who are more likely to join Cigar of the Month clubs. Their insert used heavy paper stock, good printing, and included blend information and descriptions of all the featured cigars. Another club did nothing more than print a list of the enclosed cigars, copy it on plain white copy paper, and toss it in the shipping box, while a third club didn't bother to include any additional information at all other than a business card.
The first order from one club was pretty decent. It came with a Padron, a Rocky Patel Vintage 1992, an Arturo Fuente Chateau, a St. Luis Rey, and a La Gloria Cubana. Not a bad batch. The second club offered a mix of nationally recognized brands and a couple of private labels. The third club followed suit with a mix of both popular and boutique cigars. Over the three month time period the cigars began to look more foreign to me. Sure, I got to sample some new cigars, but most of them were crap. Suffice it to say, my experience was pretty much the same as Dr. Fadem's.
So, if an online cigar store was going to start a monthly cigar club, it would have to have a much better presentation and a lot more value. Free shipping would be included, and a couple of private labels (carefully selected by quality) would be in the first order. Moreover, every pack would exceed the cost of the monthly membership in value.
Other ideas might consist of the following: A low monthly membership fee. Choice of memberships (such as a basic, "no frills" club) and a "Gold"-type club with a higher membership fee, but with more cigars, extras, etc. A free gift for joining, a membership card, discount coupons, AND even giving club members the opportunity to choose the cigars they wanted to try.
Famous scratched the idea of a monthly cigar club due to the fact that it became very labor intensive, and at the time there just wasn’t enough personnel to make it work effectively. Plus, with so many cigar smokers having been burned by "bait and switch" clubs (not to mention Dr. Fadem's and my own experience), the certainty of wooing potential members was questionable.
Like any good marketing program, a Cigar of the Month club should be profitable, but what matters most is the satisfaction of the members. Do it right, and they'll stay on. Moreover, the next time they want to buy cigars, where do you think they'll go first?
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