Paper, Printing, Postage: Eating Your Business One Bite At A Time

Here's the story that repeats, not one talked about by the experts on LinkedIn. The table on the left shows the optimal strategy for a customer segment three years ago ... the middle table shows it today ... the table on the right shows the optimal strategy three years from now if the expense structure continues to add challenges to the p&l.

Three years ago the optimal strategy for this customer was 9 mailings per year, generating $28.46 demand and $6.51 profit.

Today, the increases in paper / printing / postage require you to mail the customer 6 times per year, generating $23.24 demand and $5.06 profit. Demand is down 18%, profit is down 22% ... all because of the added expenses passed on to your business. You'll continue to mail 9 times per year, generating $28.46 demand and $4.71 profit ... less profitable but the majority of catalogers that remain just don't want to change.

If costs continue to increase similarly, you're down to mailing the customer 4 times per year, generating $18.97 demand and $4.14 profit. Most remaining catalogers don't want to change, so they'll mail 9 times per year, generating $28.46 demand and just $2.91 profit.

Either way, paper / printing / postage are eating your business one bite at a time. You get to decide if you want to optimize profit.

• Non-Optimized Profit (the route most of you will take because you don't want to change).
• $6.51 three years ago.
• $4.71 today.
• $2.91 in three years.
• Optimized Profit (my smart clients have been doing this for YEARS).
• $6.51 three years ago.
• $5.06 today.
• $4.14 in three years.

Again - show me where the paper, printing, and postage gurus are sharing this dynamic with you? They're not. They're running this aspect of your business into the ground. Until you stand up to them (i.e. shift your dollars out of print and into other marketing tactics until they provide you with cost relief), they'll continue slowly (then all at once) ending this discipline for you.