Dos and Don'ts of catalog circulation strategy
September 11, 2009
Many multichannel merchants are compelled to cut catalog circulation because of the current economic picture. Some retailers, however, are doing so in the name of “mailing smarter.” The goal is for sales to drop at only a fraction of circulation cuts. Multichannel merchants such as Williams-Sonoma and J. Crew reported double-digit reductions to circulations in the first half of this year simultaneous with better-than-expected profits. However, one retailer, Chico's, has expressed remorse recently over making cuts it later realized may have been too dramatic. Here, Kevin Hillstrom, president, MineThatData; Rod Ford, CEO, CognitiveData; and Holly Wasas, account manager, brokerage, Direct Media Millard, weigh in on how to cut back wisely.
Kevin Hillstrom, president, MineThatData
Do: Test frequency and page counts extensively
Now that your Web site is your store, catalogs play the role of generating interest, excitement and demand. This means that you may have needed 124 pages to generate enough demand in 1999, but in 2009, you might only need 64 pages, or 36 pages, to create demand. Similarly, the frequency of contacts that worked in 1999 may not work today. Extensively test page counts and frequency to different customer audiences.
Don't: Assume all customers are catalog customers
Different customers have different interests. Our best practices require us to immediately get catalogs in the mail to hotline buyers, or to contact recent, frequent, high average-order-value customers, but times have changed. Focus existing catalog best practices on rural customers 55 years of age and older who love shopping by telephone, and use online and emerging channels to have a relationship with those less responsive to catalog marketing.
Rod Ford, CEO, CognitiveData
Do: Challenge and test your customer insight processes
Direct marketers are testing in uncharted territories through the use of niche mailings, different contact mediums, social media, to attempt to discover the optimum contact strategy to maximize profits. Yet, few of these same marketers test their customer recognition capability with the same vigor. The introduction of more mediums places an even higher premium on recognizing varying customer identities from varying sources. Be sure to periodically test your customer recognition capabilities against the best practices in the market.
Don't: Underestimate the value of accurate customer information
Circulation rationalization suggests there may be more effective rhythms and mediums to touch customers than through traditional mail plans. However, any customer touch strategy that doesn't start with completely accurate customer identity and location information is destined for compromise. Only the most loyal of customers self-report changes in their name and address. Up to 3% of your customers use a name you haven't recognized before at an address unknown to you.
Holly Wasas, account manager, brokerage, Direct Media Millard
Do: Use the catalog as an advertising vehicle
Stop thinking about your catalog as your business, and think about your Web site as your business. Use the catalog to drive traffic to the Web. You can show more products, with longer descriptions on the Web. Make the Web site the store, and the catalog the advertising vehicle. It is amazing to me how few of our catalog clients understand this concept – and those that do are the ones succeeding.
Don't: Mail the same book as always if you expect to drive more sales and cut circulation at the same time
It is necessary to change the look and feel of your catalog. Give customers reasons to shop your Web site, such as mentions in the catalog of additional SKUs or customer reviews. For sale items, cut the copy and double the number of products per spread – anything to get the customer to your Web site to shop.