February 05, 2009

Do I Need To Keep Mailing Catalogs, Or Can I Stop?

The comments about catastrophe happening if you don't mail catalogs anymore are once again circulating throughout the industry.

And depending upon your point of view, that may just be the end result --- catastrophe. Or, your business could be more profitable without them. How would you know?

I have a pretty simple set of rules.
  • If you don't have a way to replace all of the customers you acquired via catalog marketing (at the same cost or cheaper), you'll die if you stop mailing catalogs for customer acquisition purposes. This is the most important rule to remember. Don't listen to all of that customer retention marketing stuff you hear about in the trade journals, vendor papers, and blogs. It's important ... but not one-tenth as important as managing customer acquisition in a disciplined manner.
  • If your customer base is 50+, and is predominantly in an exurban/rural area, you'll probably face catastrophe if you stop mailing catalogs.
  • If your organic percentage is above 70%, your catalog marketing program is not integral to your brand. Nice, but not integral.
  • If your organic percentage is above 40%, and you mail more than 15-20 catalogs a year, start cutting catalogs ... NOW! Not all of them, but many of them.
  • If your organic percentage is in the 10% to 20% range, you'll probably face a catastrophe if you stop mailing catalogs.
  • If you're still generating half or more of your sales via the telephone, you'll probably face a catastrophe if you stop mailing catalogs.
So yes, from the perspective of a catalog brand that has a loyal customer base of 50+ year old women in rural areas shopping over the telephone with an organic percentage of 15% and a robust list rental and co-op marketing program --- YES, you'll face catastrophe if you stop mailing catalogs.

But for the rest of catalog marketers ... it is time for some serious experimentation!

Of course, you can know what to do by knowing your organic percentage (hint --- mail/holdout tests), by knowing your customer distribution via Zip Code Forensics, and by knowing your channel dynamics and customer acquisition projections via Multichannel Forensics.