February 12, 2015

Ad To Sales Ratio

It is common for a cataloger to have an ad-to-sales ratio of 30% or greater.

It is common for an online marketer to have an ad-to-sales ratio of 15% or lower.

Guess what the online marketer gets to do with the 15% marketing expense savings?
  • Free Shipping.
  • Lower Prices.
  • Other Investments.
To be competitive, the cataloger has no choice. The cataloger must stop mailing 20 catalogs a year to online-centric buyers. Next, the cataloger must greatly reduce co-op expense, which for catalogers with 40% or lower annual repurchase rates, is destroying the ad-to-sales ratio.

It is nearly impossible for a cataloger to compete with an e-commerce business when 15% of sales are gobbled up on paper expense that does not materially contribute to the bottom line.

Is it any wonder e-commerce businesses routinely out-compete catalogers?

Send me an email message (kevinh@minethatdata.com) if you'd like me to fix this problem for you!

Page Counts When Bifurcation Hurts All Other Customers

Yesterday we talked about the fact that best catalog customers (a minority of your file) deserve MANY catalogs that are merchandised with...