July 18, 2010

Dear Catalog CEOs: Postage Increase, Again

Dear Catalog CEOs:

Another week, another article about a looming postage increase, courtesy of DMNews.

Regardless of your angst, you're going to cut circulation, aren't you? And you need to figure out who should receive fewer catalogs in the future. One population that makes sense are the customers who so love your brand that they will shop online without being prompted with catalog mailings.

I usually execute two Multichannel Forensics projects per month ... in those projects, I grade all customers in your database ... "A", "B", "C", "D", and "F". You cut back, cut way back, on the Cs, Ds, and Fs ... with little impact on demand and a nice boost to your p&l.

The typical project yields between a 0.5% and 1.0% profit to demand ratio. In other words, if you are a $50,000,000 business, I'll find you between $250,000 and $500,000 in profit opportunity. Some projects go way beyond that ... I found $1,500,000 for a $75,000,000 business by simply adjusting the contact frequency to average housefile buyers.

I'm taking project reservations now for September and October ... with the postage increase looming on the horizon, you want to have the analysis done this fall, so you are ready to react in 2011, correct? So contact me now to get your project into the queue.

Profit per New Customer

It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...