January 01, 2018

That's A Lot Of Paper!!!

From November 1 to December 28, these are the catalogs I received in my mailbox ... and remember, my household is not a catalog household. We might buy from a catalog once or twice a year, tops.

That's 124 catalogs in 58 days, 2.14 catalogs per day.

Average page count?  77.6.  It's like it is 1993 out there. I've been talking about smaller page counts for eleven years on this blog ... and just 19 out of 124 catalogs were < 50 pages.

124 * 77.6 = a whopping 9,622 pages that y'all want me to read in my spare time during the busiest time of the year. How many of you read 9,622 pages in books that you wanted to buy in the past year, much less November 1 - December 28?

How much do 124 catalogs weigh?

34.8 pounds.

34.8 pounds of content that, if I chose to read it, pushes me to Amazon to see if they can get me something within a day at a lower price. Omnichannel strategy does work - paper pushes the customer to Amazon ... a brand where I purchased 30 TIMES BETWEEN NOVEMBER 1 AND DECEMBER 28.

At an assumed $7.50 per thousand pages circulated catalog ad cost, these marketers spent a whopping $72.17 marketing to me from November 1 to December 28. If we assume a 40% flow-through to profit, I have to spend $180 just for the marketers to break-even. A silly 50% flow-through still requires $144 of demand to break-even.

Which didn't happen.

You can look at all of the in-house metrics you want to look at. Those metrics do not convey reality. Sum up your own experience at home. Seriously. We're going to find that a very small number of catalog-centric households are keeping the wheels on the bus ... maybe two or three million households are doing all of the spending.

Because we do a terrible job of segmenting customers (RFM typically ... a methodology invented a long, long time ago) or modeling customers (I've seen horrific models developed by the gurus you all employ - and those folks would say my models aren't anything to write home about as well), we do the following:

Do you see what we do in that image? We average two customers with huge levels of annual profit with eight break-even customers, yielding a "segment" of customers that is highly profitable. Then we treat all ten customers the same way ... we pummel all of 'em with catalogs ... which creates the scenario above, and further accelerates the dynamic where we make less money on most of the customer base.

It's time to do something different in 2018, don't you think?

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