September 12, 2011

Hard Decisions: A Vendor Summit

Ok, you ran your mail/holdout test for a quarter, and you found out that 50% of your housefile demand happens without mailing any catalogs.

I realize that nobody believes this.  

Your database provider does matchbacks, and they tell you that you're interpreting the data wrong.  You aren't interpreting the data wrong.

Your printer tells you that you'll get big discounts and efficiencies if you pump up your page counts.  They'll tell you to remail your catalogs to save even more money.  All of this advice, of course, is contrary to what your test results tell you ... your test results tell you to mail fewer catalogs and fewer pages.

Your paper rep tells you that you can get big discounts if you mail more frequently, and if you buy paper well in advance.  You need to be nimble, making decisions closer to in-home dates.

You co-op rep will tell you that if you cut back on customer acquisition, you'll shrink and die.  You know that the organic percentage has nothing to do with customer acquisition, and you also know that it's getting harder and harder to acquire customers with large catalogs.

In other words, it is time to make some hard decisions.

It is time to hold a vendor summit.

On your dime, invite your most important vendors to your campus for a one-day session.

Share with them the realities of your business.  Show them your mail/holdout results.  Yes, they're going to tell you how wrong you are.  You aren't wrong, you're only showing them how your customers behave.

Tell them that you don't need to shave another 3% off of their costs.  Tell them that you need solutions that meet the needs of a catalog business in 2012, not solutions that meet the needs of a catalog business in 2002.

It's time to make some hard decisions about our business.  Bring the vendor community in, and share the realities of modern customer behavior with them.

1 comment:

  1. this is all very consistent with what gary halbert used to say. of course, no one knows who gary halbert is anymore. their loss. he said this years ago, nonetheless. excellent post.


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