January 10, 2010

Dear Catalog CEOs: Over-Contacting Customers

Dear Catalog CEOs:

There are four ways that modern Catalog Marketers over-contact customers. Let's explore how each strategy is costing you profit ... lots and lots of profit.


Strategy #1 = Matchbacks: When I analyze matchback analytics vs. mail/holdout tests, I observe a gross over-representation of catalog marketing effectiveness as stated by matchback analytics. We are over-circulating, usually by 10% to 50%, when we blindly follow our matchback results. I can help you fix this problem. If you are a $50,000,000 catalog brand, this level of over-circulation due to the inaccuracies of matchback analytics costs you, on average, $200,000 to $1,000,000 of annual profit.

Strategy #2 = Pages: Excessive catalog pages can be poison. Given printing/postage discounts, there is a swing toward adding pages these days among some catalogers. Every time you add four pages to your catalog, you reduce circulation depth, because the incremental pages will perform below break-even to marginal customers, causing you to shrink circulation ... and when you shrink circulation, you shrink your twelve month file, and when you shrink your twelve month file, you shrink the future potential of your business.

Strategy #3 = Contacts: It is common for contacts to have more impact these days than incremental pages ... two 64 page contacts a month usually outperforms one 128 page contact a month. Remails, however, should be used only when there is an absolute dearth of employee resources to create new pages ... remember, your online competition are changing landing pages dynamically, creating newness that cannot be matched by a remailed catalog. And be sure to execute contact strategy tests ... test thirteen contacts a quarter vs. four contacts a quarter vs. zero contacs a quarter ... use the results to determine the "optimal" contact strategy per segment.

Strategy #4 = Catalogs vs. E-Mail vs. Search: In every business I've analyzed, there is a unique relationship between Catalog Marketing, E-Mail Marketing, and Search Marketing. Carefully test combinations of Catalog Contacts and E-Mail Contacts ... measuring the sales results across all channels.


In 2010, every Catalog CEO should have an initiative to understand how each strategy outlined above impacts the bottom line.

If you need my assistance with these issues, please do not hesitate to contact me.

Thanks,
Kevin

2 comments:

  1. Question to Strategy #3: In the past re-mailing the same catalog without any changes after 3 weeks pulled about 60 % of the original response. I do not see many do it like this any more. Is this ratio no longer valid and should be discarded?

    ReplyDelete
  2. The ratio is valid ... the question is, in a modern world, can you cost-engineer a new catalog that performs at 100% of the original response?

    In almost all cases with my clients, the answer is "yes".

    ReplyDelete