September 06, 2010

Page Increases

Recently, one of our loyal readers asked about adding pages to a catalog.
  • "Don't you have to mail a big catalog in order to make decisions about whether you can have a small catalog? In other words, you have to mail big catalogs, they allow you to understand how responsive customers truly are, correct?"
Turns out you can use a small catalog as a base.

Pretend you have a 64 page catalog that generates $2.00 of demand per customer. What would happen if you had a 124 page catalog instead?

Use the square root rule to guesstimate the outcome!

(124 / 64) ^ (0.50) * ($2.00) = $2.78.

Now, simply run your profit and loss statement on each outcome, at each circulation depth, and decide for yourself what the right approach is ... 64 pages, 124 pages, or any other page combination!

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