Important Lessons Learned
by Stephen Lett
I began my catalog career over 40 years ago. I have learned several lessons over the years about the dos and don'ts of catalog marketing. I'd like to pass along some of what I have learned and the principles we follow today as we advise our customers. Over the years, I have seen companies with the best of intentions make decisions opposite of what they should have done. Often these decisions have been an attempt to save money (or at least they thought so). In many cases, adding vs. taking away can be the better choice.
- Slash and Burn Theory - You cannot "slash and burn" your way to prosperity. By this I mean you can't cut circulation and direct selling expenses as a way to improve profitability. Yes, you need to mail "smart" but cutting circulation simply to reduce your printing and postage bill will often result in a downward spiral and the loss of contribution dollars to your bottom line. It is how you go about trying to reduce direct selling expenses. For example, when was the last time you went to the marketplace to obtain print bids? Or, have you looked into purchasing your own paper? There are many ways to save money other than the "slash and burn" approach.
- Seasonality Factors - You need to go fishing when the fish are biting. Seasonal factors play a huge role in determining your level of circulation, both house and prospecting. You can't make consumers buy. Therefore, it is important that you maintain the right level of circulation depending on the time of the year. Typically, holiday is the best season for most consumer catalogs. Fall represent 70% to 75% of your holiday results. Spring is 60% to 70% of the response you will get during holiday. Summer is the least responsive period generating response rates 55% to 60% of holiday. Maximize your results when response rates will be at the highest level and don't force the issue.
- Frequency of Contact - It is difficult to over mail your own house file (or at least some segments of your file). Therefore, do not reduce the number of mailings to your house file as a way to save money. Cutting out drops to your own customers will cause your contribution to profit & overhead to decrease. Not all segments of your house file are mailed every time. The more recent cells can be mailed more frequently and strict R-F-M guidelines should be followed. Re-mails to you house file can be done cost effectively without the added expense of producing a completely new catalog.
- Prospecting - When should you stop prospecting? Never! The attrition rate of your house file will help determine the desired level of prospecting. A catalog will grow by approximately the same percentage increase in your 12-month buyer file. Therefore, if you are prospecting and growing your buyer file, your business will also grow.
- Page Count - Don't cut page count as a way to save money. Reducing page count will reduce sales and contribution to profit & overhead. Look for ways to increase, not decrease, page count. If your catalog weighs less than 3.1 ounces, cutting pages will impact your bottom-line. Your postage costs will remain the same and the few dollars you save on paper and print manufacturing will be minor compared with the less of revenue and contribution dollars.
Make the right choices. Learn from my experiences. Knowing what to do is as important as knowing what not to do. I hope these lessons learned help you improve the results of your business.