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Catalog Marketing 101
Workshop
By
Dudley Stevenson, Mark Eubanks

(651) 315-7588

Catalog Marketing 101 Workshop

1
Table of Contents
• Part 1 – Catalog Marketing Overview & E-Commerce
•
•
•
•
•
•
•

Synergy
Part 2 – Front & Back End Marketing
Part 3 - Catalog Merchandising
Part 4 – Catalog Creative & Design
Part 5 – Catalog Copy
Part 6 – Catalog Production
Part 7 – Management, Financials & Analytics
Part 8 – Operations & Fulfillment

(651) 315-7588

Marketing Planning 101 Workshop

2
Catalog Marketing 101
Part 2
Front & Back End Marketing

(651) 315-7588

Marketing Planning 101 Workshop

3
Know Your Objectives Before You
Mail
• Catalog and Internet Marketing Strategies
• Merchandising Strategies
• Creative Strategies
• Operations Strategies

(651) 315-7588

Marketing Planning 101 Workshop

4
Catalog & Internet Marketing
Strategies
1. Reduce prospect circulation
2. Don't mail so deeply to your house file
3. Increase the number of mailings to your best customers
4. Cut back on high cost-per-customer acquisition methods:

space ads, Internet banner ads, etc.
5. Decrease promotion activity and tie any promotions to high
average order value (AOV)
6. Don't do any non-selling (brand) advertising

(651) 315-7588

Marketing Planning 101 Workshop

5
Merchandising Strategies
1. Put high contribution items (profitable after the cost of their
2.
3.
4.
5.

space) in the key catalog hot spots and spread hot spots.
Don't offer a high percentage, more than 25 percent, of new
items.
Raise your threshold of success in your item analysis.
Increase your margin.
Increase your AOV with specials, bundles, multiple item
discounts, cross sells, etc.

(651) 315-7588

Marketing Planning 101 Workshop

6
Creative Strategies
• Maximize the use of space.
• Make sure that all high-profit items are given hero status with

the right amount of space, call-outs or other attention grabbers.
• Work with the merchants to improve your best selling items.

(651) 315-7588

Marketing Planning 101 Workshop

7
Operations Strategies
• Increase your shipping and handling charges, especially at the

low end of the shipping chart.
• Enforce strict policies on not reducing or eliminating shipping
charges to customers who complain, or paying for return
shipping.
• Use a lower-cost carrier, such as a USPS consolidator for
outbound packages.
• Upsell specials and close-outs on the phone.

(651) 315-7588

Marketing Planning 101 Workshop

8
Concept of Front vs. Back End
• The concept of front end / back end marketing
• Front end marketing
– Acquiring new customers
– Acquiring new customers costs money
– Many catalogers lose money on first time buyers because of the
marketing dollars invested to acquire that name
• Back end marketing

– Converting 1st time buyers in to multi-buyers
– Ongoing marketing to existing customers
– Reactivating former customers who have stopped buying

(651) 315-7588

Marketing Planning 101 Workshop

9
Front End Marketing
Objective

How results are measured

• Acquire new, first time
buyers

• Cost per customer

• Acquire new leads
• Acquire new inquiries
• Convert leads and inquiries
to customers

• Cost per lead
• Cost per name
• Cost of conversion

• Minimize cost of building
the customer file

(651) 315-7588

Marketing Planning 101 Workshop

10
Back End Marketing
Objective

How results are measured

• Convert 1-time buyers into
2-time buyers

• Growth of multi-buyers

• Maximize number of
mailings to customer file

• Number of customer
mailings per year

• Make a profit

• Return on investment
• Return on sales
• Value of customer over 3
years

(651) 315-7588

Marketing Planning 101 Workshop

11
The Road to Catalog Profitability

(651) 315-7588

Marketing Planning 101 Workshop

12
The Hierarchy of a Customer

(651) 315-7588

Marketing Planning 101 Workshop

13
Ways to Build Your Customer File
• List rental

• Broadcast (television, radio)

• Customer referrals

• Internet (website)

• Space advertising

• Social media (MySpace,

• Newspaper FSI
• Package inserts

•

• Co-op mailings

•

• Trade shows
• Co-op catalog shoppers
• Card decks

•
•

Google+, Facebook,
LinkedIn, YouTube)
Twitter
Banner ads
Airlines
Public relations

• Product inserts
(651) 315-7588

Marketing Planning 101 Workshop

14
3 Vertical Markets in List Industry
• Response lists
• Circulation lists
• Compiled lists

(651) 315-7588

Marketing Planning 101 Workshop

15
Response Lists
• Best type of list available – best prospects
• Proven catalog order buyers
• Huge universe available for consumer offers
• Large business lists available
• Can match product with offer
• Most expensive
• Good investment

(651) 315-7588

Marketing Planning 101 Workshop

16
Circulation Lists
• Publication subscribers that can be targeted by their expressed
•
•
•
•

personal or business interests
Not all paid subscribers
Can target consumer interests
May not work well for catalog offer
Usually less expensive than response lists

(651) 315-7588

Marketing Planning 101 Workshop

17
Compiled Lists
• List of people and companies put together from governmental,
•
•
•
•
•

census, telephone, or other publicly available information
Most basic type of list
Strong lists for business mailers
Good for small, local consumer offers
Good for sampling programs
Least expensive; may be discounted for volume users

(651) 315-7588

Marketing Planning 101 Workshop

18
List Strategies
•
•
•
•
•
•
•
•

Keep old buyers, old inquires who you are not mailing and put them
into the merge purge.
Use zip overlays to make subscriber lists work.
Create a mini-file (match code) record of prior-mailed names (nonresponders) and use a suppress file during the merge/purge.
Pre-qualify a name with a phone call or postcard.
Track list results with tenacity.
Target- segment.
Test.
Watch seasonality of mailings.

(651) 315-7588

Marketing Planning 101 Workshop

19
New Customer Acquisition
Strategies
•
•
•
•
•
•
•
•

Understand the difference between front end and back end (and
middle end)
Understand the hierarchy of a customer
Test new alternative ways to build your customer list. .. without
using the mail
Get smarter with your list prospecting
Improve the tracking of results ... mail, phone, fax
Know (through careful measurement) what a new customer costs
Correlate back end (customer) name value with front end name
sources
Turn around catalog requests (inquires) quickly

(651) 315-7588

Marketing Planning 101 Workshop

20
Your Customer List
• Your buyer list is your most valuable asset.
• Your buyer list is perishable.
• Your buyer list will out pull outside lists by 4 to 10 times.
• How often can your customer list be promoted?
• When should you merge/purge your buyer list?
• Rental of your buyer lists - another way to generate income.

(651) 315-7588

Marketing Planning 101 Workshop

21
All Customers Are Not Created
Equal
• Best customer
– High $ value; multi-buyer; last 6 months recency
• Next best customer

– Medium $ value; multi-buyer; last 12 months recency
• Average customer
– Medium $ value; 1-time buyer; last 18 months recency
• Poor customer

– Low $ value; 1-time buyer; last 24 months recency

(651) 315-7588

Marketing Planning 101 Workshop

22
Customer Segmentation
• Is the use of database information to target your marketing

efforts
• Segmentation applications
– Generally used with customer list
– Recency, frequency, monetary
– Regression analysis

(651) 315-7588

Marketing Planning 101 Workshop

23
Segmentation Factors Tested in
Regression Analysis
• Date of last purchase - - by three month segments
• Number of purchases
• Previous products purchased
• $ spent with catalog
• Matching against outside lists
• Purchased from multiple catalogs of the same company

(651) 315-7588

Marketing Planning 101 Workshop

24
Mailing Customer More Often
• Most catalogs underutilize their customer list
• Mailing options to mail customer list more frequently
– Mail totally new catalog
– Mail catalog with new cover
– Mail catalog with new cover and outer signature
– Mail catalog with new format
• Tabloid
• Mini-catalog
• Newsletter

(651) 315-7588

Marketing Planning 101 Workshop

25
Catalog Circulation Planning
Factors
• Number of current customers
• Current house file segments
• Customer acquisition goals
• Sales goals
• In home date
• Print quantity
• Re-mail strategy
• Merge purge strategy
• Break even requirements

(651) 315-7588

Marketing Planning 101 Workshop

26
House File Management Practices
• Develop a strong relationship with broker and manager
– Best to have brokerage and management in same company
• List rental income – generate income by renting your list.
• Leverage list for exchanges which lowers cost of acquiring a
•
•
•
•

customer
Protect mail dates
Offer non competitive list rental rates
Offer reduced list rental rate for fundraisers and publishers
Make use of overlays and appending services to refine
selections for users of your file

(651) 315-7588

Marketing Planning 101 Workshop

27
Customer Loyalty Programs
• Developing customer loyalty programs to support your sales

efforts is important to establishing long term customer loyalty.
Examples of these programs/offers:
–
–
–
–
–
–

Thank you’s
Discounts
Bogo’s (Buy 1, get 1 free)
Shipment upgrades (e.g., free shipping, express shipping)
Extended warranties
Free personalization

(651) 315-7588

Marketing Planning 101 Workshop

28
Customer Reactivation
•

•

Customer reactivation needs to be part of your overall catalog
marketing plan. Depending on why a customer stopped
purchasing, it is less expensive to reactivate former buyers
than acquire new customers.
Customer reactivation involves putting together marketing
programs that get former customers to start purchasing from
you again. Examples:
–
–
–
–

Offers
Letters
Discounts
Bogos (buy-one, get-one – e.g. “buy 1, get 1 free”)

(651) 315-7588

Marketing Planning 101 Workshop

29
Reactivating Inactive Customers
• A major area of opportunity for catalogers
• Build on past loyalty, purchase activity
• Special messages that work
– We miss you
– We want you
– Last chance
• Getting a special message across

– Outer wrap
– Sticker on cover
– Special letter in envelope

(651) 315-7588

Marketing Planning 101 Workshop

30
Catalog Requests Generation
• Methods of generating catalog requesters:
• Referrals
• Space advertising
• Web site
• Mobile marketing
• Radio/television advertising
• Hang tags
• Package inserts
• Catalog/magazine bind in programs
• Catalog/magazine blow in programs
• Direct mail
• Bounce backs in gift recipient shipments

(651) 315-7588

Marketing Planning 101 Workshop

31
Alternative Revenue Opportunities
• Alternative avenues for generating revenues from your

catalogs and catalog customers
–
–
–
–

Package inserts (third party paid)
Blow ins (third party paid)
Bind ins (third party paid)
List rental revenue from renting your house file (customer list) to
other marketers

(651) 315-7588

Marketing Planning 101 Workshop

32
Catalog Mailing Frequency
• How frequently do you mail your entire customer list or

segments of your list?
– The only way to answer this question is to test and analyze.
– If you don’t mail often enough you lose the opportunity to sell
merchandise and build the relationship between you and the
customer.
– If you mail too often, the newest catalog will steal sales from the
current catalog.
– It pays to mail more catalogs, more often, to better customers…
these customers tend to buy more often.

(651) 315-7588

Marketing Planning 101 Workshop

33
How to Increase Catalog Sales
• Product/space allocation analysis
• Proper targeting for mailings
• Price point analysis
• Refresh product offering 40% to 60% by removing dogs and

testing new or rolling out winners
• Understand value of re-mailing house file and multi-buyers

(651) 315-7588

Marketing Planning 101 Workshop

34
List Selection Process
•
•
•
•
•
•
•
•
•
•
•

Define your catalog product profile.
Define your target market.
Determine which kind of lists are appropriate: response, buyer, mass or compiled.
Research and collect data on lists available.
Analyze list histories in order to match your offer.
Investigate selectivity within list.
Screen lists which will allow you to mail your catalog.
Price out lists to fit your budget.
Determine quantities available.
Develop your circulation plan.
Schedule a test.

(651) 315-7588

Marketing Planning 101 Workshop

35
Customer List Strategies Summary
• Segment your customer list to find your best customers
• Mail your best customers more often
• Build special "perks" for being a customer
• Work at building customer loyalty
• Consider a spin-off catalog to generate additional sales from

your customers
• Build a reactivation program

(651) 315-7588

Marketing Planning 101 Workshop

36
Catalog Offer Design
• What is the offer?
– It’s simply your entire selling proposition to the prospect or customer.

• The offer is the 2nd most important factor
– Behind list selection and audience targeting, in determining the success
of a catalog.

• Important to think of your market as you structure your offer.
– What’s their sex, age, educational level, special interests, and socialeconomic status?

• How you state your offer counts
– It both selects and involves the prospects.
– It determines the quality of the customers who respond.
– Creatively, it’s important to find news ways of stating an existing offer.

(651) 315-7588

Marketing Planning 101 Workshop

37
Catalog Offer Design (cont’d)
•

You need to balance your offer with the products being sold and the
customers you want to sell– too much of a good thing can attract the
wrong kind of buyers.
• Check that your offer is relevant to both your target audience and
the product in question. Mismatching the offer to the audience will
make it less attractive and may dissuade fence sitters from
responding.
• Before working up your offer look at what your competitors do.
• If you can make offers that do not obviously reduce the price of
your product, it is worth trying to do so. If you bring a customer on
board at a reduced margin and a special price, there is every chance
that they will expect the same come the next time they purchase.

(651) 315-7588

Marketing Planning 101 Workshop

38
What Makes Up Your Offer?

(651) 315-7588

Marketing Planning 101 Workshop

39
Questions To Ask About Your Offer
• Does it help you meet your financial / marketing objectives?
– Immediate profit
– Back-end long term business
– Developing new market
• Is it the strongest offer you can make?
• Is the offer overstated?
• Would additional incentives help?
•

For more information on offer design and development, see our Direct
Marketing Workshop 3 Tutorial – Appeal and Offer Development

(651) 315-7588

Marketing Planning 101 Workshop

40
Catalog Call To Actions
• Passive Call to Actions
– Phone (toll-free number)
– Website (general site or dedicated landing page)
– Order form
• Active Call to Actions (e.g.)

–
–
–
–

Free shipping on orders over $50
Order now and receive 1 item free with every 2 ordered
Limited quantity
Sale ends 09/01/13

(651) 315-7588

Marketing Planning 101 Workshop

41
Catalog Call to Action - Ordering
• Today, catalog customers can order three basic ways. They

can order via (1) Phone, (2) Website or (3) Mail.
• Yes, people still order through the mail and they can be some
of the best catalog customers in the world.
• The phone number and website URL should be on the bottom
of each page or phone number and URL on alternating pages.
• The mail order form is usually located in the center of the
catalog.

(651) 315-7588

Marketing Planning 101 Workshop

42

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Catalog Marketing 101 (2 of 8)

  • 1. Catalog Marketing 101 Workshop By Dudley Stevenson, Mark Eubanks (651) 315-7588 Catalog Marketing 101 Workshop 1
  • 2. Table of Contents • Part 1 – Catalog Marketing Overview & E-Commerce • • • • • • • Synergy Part 2 – Front & Back End Marketing Part 3 - Catalog Merchandising Part 4 – Catalog Creative & Design Part 5 – Catalog Copy Part 6 – Catalog Production Part 7 – Management, Financials & Analytics Part 8 – Operations & Fulfillment (651) 315-7588 Marketing Planning 101 Workshop 2
  • 3. Catalog Marketing 101 Part 2 Front & Back End Marketing (651) 315-7588 Marketing Planning 101 Workshop 3
  • 4. Know Your Objectives Before You Mail • Catalog and Internet Marketing Strategies • Merchandising Strategies • Creative Strategies • Operations Strategies (651) 315-7588 Marketing Planning 101 Workshop 4
  • 5. Catalog & Internet Marketing Strategies 1. Reduce prospect circulation 2. Don't mail so deeply to your house file 3. Increase the number of mailings to your best customers 4. Cut back on high cost-per-customer acquisition methods: space ads, Internet banner ads, etc. 5. Decrease promotion activity and tie any promotions to high average order value (AOV) 6. Don't do any non-selling (brand) advertising (651) 315-7588 Marketing Planning 101 Workshop 5
  • 6. Merchandising Strategies 1. Put high contribution items (profitable after the cost of their 2. 3. 4. 5. space) in the key catalog hot spots and spread hot spots. Don't offer a high percentage, more than 25 percent, of new items. Raise your threshold of success in your item analysis. Increase your margin. Increase your AOV with specials, bundles, multiple item discounts, cross sells, etc. (651) 315-7588 Marketing Planning 101 Workshop 6
  • 7. Creative Strategies • Maximize the use of space. • Make sure that all high-profit items are given hero status with the right amount of space, call-outs or other attention grabbers. • Work with the merchants to improve your best selling items. (651) 315-7588 Marketing Planning 101 Workshop 7
  • 8. Operations Strategies • Increase your shipping and handling charges, especially at the low end of the shipping chart. • Enforce strict policies on not reducing or eliminating shipping charges to customers who complain, or paying for return shipping. • Use a lower-cost carrier, such as a USPS consolidator for outbound packages. • Upsell specials and close-outs on the phone. (651) 315-7588 Marketing Planning 101 Workshop 8
  • 9. Concept of Front vs. Back End • The concept of front end / back end marketing • Front end marketing – Acquiring new customers – Acquiring new customers costs money – Many catalogers lose money on first time buyers because of the marketing dollars invested to acquire that name • Back end marketing – Converting 1st time buyers in to multi-buyers – Ongoing marketing to existing customers – Reactivating former customers who have stopped buying (651) 315-7588 Marketing Planning 101 Workshop 9
  • 10. Front End Marketing Objective How results are measured • Acquire new, first time buyers • Cost per customer • Acquire new leads • Acquire new inquiries • Convert leads and inquiries to customers • Cost per lead • Cost per name • Cost of conversion • Minimize cost of building the customer file (651) 315-7588 Marketing Planning 101 Workshop 10
  • 11. Back End Marketing Objective How results are measured • Convert 1-time buyers into 2-time buyers • Growth of multi-buyers • Maximize number of mailings to customer file • Number of customer mailings per year • Make a profit • Return on investment • Return on sales • Value of customer over 3 years (651) 315-7588 Marketing Planning 101 Workshop 11
  • 12. The Road to Catalog Profitability (651) 315-7588 Marketing Planning 101 Workshop 12
  • 13. The Hierarchy of a Customer (651) 315-7588 Marketing Planning 101 Workshop 13
  • 14. Ways to Build Your Customer File • List rental • Broadcast (television, radio) • Customer referrals • Internet (website) • Space advertising • Social media (MySpace, • Newspaper FSI • Package inserts • • Co-op mailings • • Trade shows • Co-op catalog shoppers • Card decks • • Google+, Facebook, LinkedIn, YouTube) Twitter Banner ads Airlines Public relations • Product inserts (651) 315-7588 Marketing Planning 101 Workshop 14
  • 15. 3 Vertical Markets in List Industry • Response lists • Circulation lists • Compiled lists (651) 315-7588 Marketing Planning 101 Workshop 15
  • 16. Response Lists • Best type of list available – best prospects • Proven catalog order buyers • Huge universe available for consumer offers • Large business lists available • Can match product with offer • Most expensive • Good investment (651) 315-7588 Marketing Planning 101 Workshop 16
  • 17. Circulation Lists • Publication subscribers that can be targeted by their expressed • • • • personal or business interests Not all paid subscribers Can target consumer interests May not work well for catalog offer Usually less expensive than response lists (651) 315-7588 Marketing Planning 101 Workshop 17
  • 18. Compiled Lists • List of people and companies put together from governmental, • • • • • census, telephone, or other publicly available information Most basic type of list Strong lists for business mailers Good for small, local consumer offers Good for sampling programs Least expensive; may be discounted for volume users (651) 315-7588 Marketing Planning 101 Workshop 18
  • 19. List Strategies • • • • • • • • Keep old buyers, old inquires who you are not mailing and put them into the merge purge. Use zip overlays to make subscriber lists work. Create a mini-file (match code) record of prior-mailed names (nonresponders) and use a suppress file during the merge/purge. Pre-qualify a name with a phone call or postcard. Track list results with tenacity. Target- segment. Test. Watch seasonality of mailings. (651) 315-7588 Marketing Planning 101 Workshop 19
  • 20. New Customer Acquisition Strategies • • • • • • • • Understand the difference between front end and back end (and middle end) Understand the hierarchy of a customer Test new alternative ways to build your customer list. .. without using the mail Get smarter with your list prospecting Improve the tracking of results ... mail, phone, fax Know (through careful measurement) what a new customer costs Correlate back end (customer) name value with front end name sources Turn around catalog requests (inquires) quickly (651) 315-7588 Marketing Planning 101 Workshop 20
  • 21. Your Customer List • Your buyer list is your most valuable asset. • Your buyer list is perishable. • Your buyer list will out pull outside lists by 4 to 10 times. • How often can your customer list be promoted? • When should you merge/purge your buyer list? • Rental of your buyer lists - another way to generate income. (651) 315-7588 Marketing Planning 101 Workshop 21
  • 22. All Customers Are Not Created Equal • Best customer – High $ value; multi-buyer; last 6 months recency • Next best customer – Medium $ value; multi-buyer; last 12 months recency • Average customer – Medium $ value; 1-time buyer; last 18 months recency • Poor customer – Low $ value; 1-time buyer; last 24 months recency (651) 315-7588 Marketing Planning 101 Workshop 22
  • 23. Customer Segmentation • Is the use of database information to target your marketing efforts • Segmentation applications – Generally used with customer list – Recency, frequency, monetary – Regression analysis (651) 315-7588 Marketing Planning 101 Workshop 23
  • 24. Segmentation Factors Tested in Regression Analysis • Date of last purchase - - by three month segments • Number of purchases • Previous products purchased • $ spent with catalog • Matching against outside lists • Purchased from multiple catalogs of the same company (651) 315-7588 Marketing Planning 101 Workshop 24
  • 25. Mailing Customer More Often • Most catalogs underutilize their customer list • Mailing options to mail customer list more frequently – Mail totally new catalog – Mail catalog with new cover – Mail catalog with new cover and outer signature – Mail catalog with new format • Tabloid • Mini-catalog • Newsletter (651) 315-7588 Marketing Planning 101 Workshop 25
  • 26. Catalog Circulation Planning Factors • Number of current customers • Current house file segments • Customer acquisition goals • Sales goals • In home date • Print quantity • Re-mail strategy • Merge purge strategy • Break even requirements (651) 315-7588 Marketing Planning 101 Workshop 26
  • 27. House File Management Practices • Develop a strong relationship with broker and manager – Best to have brokerage and management in same company • List rental income – generate income by renting your list. • Leverage list for exchanges which lowers cost of acquiring a • • • • customer Protect mail dates Offer non competitive list rental rates Offer reduced list rental rate for fundraisers and publishers Make use of overlays and appending services to refine selections for users of your file (651) 315-7588 Marketing Planning 101 Workshop 27
  • 28. Customer Loyalty Programs • Developing customer loyalty programs to support your sales efforts is important to establishing long term customer loyalty. Examples of these programs/offers: – – – – – – Thank you’s Discounts Bogo’s (Buy 1, get 1 free) Shipment upgrades (e.g., free shipping, express shipping) Extended warranties Free personalization (651) 315-7588 Marketing Planning 101 Workshop 28
  • 29. Customer Reactivation • • Customer reactivation needs to be part of your overall catalog marketing plan. Depending on why a customer stopped purchasing, it is less expensive to reactivate former buyers than acquire new customers. Customer reactivation involves putting together marketing programs that get former customers to start purchasing from you again. Examples: – – – – Offers Letters Discounts Bogos (buy-one, get-one – e.g. “buy 1, get 1 free”) (651) 315-7588 Marketing Planning 101 Workshop 29
  • 30. Reactivating Inactive Customers • A major area of opportunity for catalogers • Build on past loyalty, purchase activity • Special messages that work – We miss you – We want you – Last chance • Getting a special message across – Outer wrap – Sticker on cover – Special letter in envelope (651) 315-7588 Marketing Planning 101 Workshop 30
  • 31. Catalog Requests Generation • Methods of generating catalog requesters: • Referrals • Space advertising • Web site • Mobile marketing • Radio/television advertising • Hang tags • Package inserts • Catalog/magazine bind in programs • Catalog/magazine blow in programs • Direct mail • Bounce backs in gift recipient shipments (651) 315-7588 Marketing Planning 101 Workshop 31
  • 32. Alternative Revenue Opportunities • Alternative avenues for generating revenues from your catalogs and catalog customers – – – – Package inserts (third party paid) Blow ins (third party paid) Bind ins (third party paid) List rental revenue from renting your house file (customer list) to other marketers (651) 315-7588 Marketing Planning 101 Workshop 32
  • 33. Catalog Mailing Frequency • How frequently do you mail your entire customer list or segments of your list? – The only way to answer this question is to test and analyze. – If you don’t mail often enough you lose the opportunity to sell merchandise and build the relationship between you and the customer. – If you mail too often, the newest catalog will steal sales from the current catalog. – It pays to mail more catalogs, more often, to better customers… these customers tend to buy more often. (651) 315-7588 Marketing Planning 101 Workshop 33
  • 34. How to Increase Catalog Sales • Product/space allocation analysis • Proper targeting for mailings • Price point analysis • Refresh product offering 40% to 60% by removing dogs and testing new or rolling out winners • Understand value of re-mailing house file and multi-buyers (651) 315-7588 Marketing Planning 101 Workshop 34
  • 35. List Selection Process • • • • • • • • • • • Define your catalog product profile. Define your target market. Determine which kind of lists are appropriate: response, buyer, mass or compiled. Research and collect data on lists available. Analyze list histories in order to match your offer. Investigate selectivity within list. Screen lists which will allow you to mail your catalog. Price out lists to fit your budget. Determine quantities available. Develop your circulation plan. Schedule a test. (651) 315-7588 Marketing Planning 101 Workshop 35
  • 36. Customer List Strategies Summary • Segment your customer list to find your best customers • Mail your best customers more often • Build special "perks" for being a customer • Work at building customer loyalty • Consider a spin-off catalog to generate additional sales from your customers • Build a reactivation program (651) 315-7588 Marketing Planning 101 Workshop 36
  • 37. Catalog Offer Design • What is the offer? – It’s simply your entire selling proposition to the prospect or customer. • The offer is the 2nd most important factor – Behind list selection and audience targeting, in determining the success of a catalog. • Important to think of your market as you structure your offer. – What’s their sex, age, educational level, special interests, and socialeconomic status? • How you state your offer counts – It both selects and involves the prospects. – It determines the quality of the customers who respond. – Creatively, it’s important to find news ways of stating an existing offer. (651) 315-7588 Marketing Planning 101 Workshop 37
  • 38. Catalog Offer Design (cont’d) • You need to balance your offer with the products being sold and the customers you want to sell– too much of a good thing can attract the wrong kind of buyers. • Check that your offer is relevant to both your target audience and the product in question. Mismatching the offer to the audience will make it less attractive and may dissuade fence sitters from responding. • Before working up your offer look at what your competitors do. • If you can make offers that do not obviously reduce the price of your product, it is worth trying to do so. If you bring a customer on board at a reduced margin and a special price, there is every chance that they will expect the same come the next time they purchase. (651) 315-7588 Marketing Planning 101 Workshop 38
  • 39. What Makes Up Your Offer? (651) 315-7588 Marketing Planning 101 Workshop 39
  • 40. Questions To Ask About Your Offer • Does it help you meet your financial / marketing objectives? – Immediate profit – Back-end long term business – Developing new market • Is it the strongest offer you can make? • Is the offer overstated? • Would additional incentives help? • For more information on offer design and development, see our Direct Marketing Workshop 3 Tutorial – Appeal and Offer Development (651) 315-7588 Marketing Planning 101 Workshop 40
  • 41. Catalog Call To Actions • Passive Call to Actions – Phone (toll-free number) – Website (general site or dedicated landing page) – Order form • Active Call to Actions (e.g.) – – – – Free shipping on orders over $50 Order now and receive 1 item free with every 2 ordered Limited quantity Sale ends 09/01/13 (651) 315-7588 Marketing Planning 101 Workshop 41
  • 42. Catalog Call to Action - Ordering • Today, catalog customers can order three basic ways. They can order via (1) Phone, (2) Website or (3) Mail. • Yes, people still order through the mail and they can be some of the best catalog customers in the world. • The phone number and website URL should be on the bottom of each page or phone number and URL on alternating pages. • The mail order form is usually located in the center of the catalog. (651) 315-7588 Marketing Planning 101 Workshop 42

Notas del editor

  1. Breakthrough success comes from first developing an understanding of what your measures of success will be and then planning all of your efforts toward effecting those measures. For a catalog marketer, merchant, art director or operations manager, this means first understanding your owner's, company's or department's objectives. You can't begin to achieve success if you don't know your overall goals and the goal of each individual mailing. Once you are aware of the corporate objectives, you can begin creating plans for how your department can support those objectives. Developing a plan before mailing will give you the tool you need to evaluate the success of that effort against your benchmark. It will also ensure that what you are about to undertake will, indeed, move you in the direction you are striving to go. And most importantly, creating your plans from the overall company objectives will ensure that everyone is acting in concert. There should be a pro-forma profit & loss (P&L) developed for each mailing so that the expectations of the mailing are clear. An actual P&L developed during post analysis should then be compared to the plan. I suggest to our clients that the P&L be done at the segment level so they will know which media codes and which offers are the most profitable. Building a segment-level P&L will also help you make sure that you have put together a mailing that will achieve your company goals. Here are some specific examples of how proper planning and execution can be undertaken in each functional area to achieve a shared objective: increasing profitability. Not all of these strategies may work with your brand and positioning. Be wise in choosing what to implement. There are different strategies for other objectives such as growing your house file or growing your top line sales, but hopefully these examples have demonstrated the importance of everyone in your company working together to achieve common objectives, once you know what those objectives are.
  2. Catalog and Internet Marketing Strategies 1. Reduce prospect circulation—mail only proven rental lists with past performance at or above your variable breakeven. 2. Don't mail so deeply to your house file—mailing your worst recency, frequency, monetary (RFM) segments can be as costly as prospecting. 3. Increase the number of mailings to your best customers—mail another book at your best time of year to your top customers. 4. Cut back on high cost-per-customer acquisition methods: space ads, Internet banner ads, etc. 5. Decrease promotion activity and tie any promotions to high average order value (AOV)—make sure that any promotions you are doing are adding new customers at or above breakeven (use your P&L plan at the segment level) or are increasing profitability from current customers by increasing response or AOV more than the cost of the promotion. 6. Don't do any non-selling (brand) advertising—make sure that all of your advertising efforts are supporting a response vehicle.
  3. Merchandising Strategies 1. Put high contribution items (profitable after the cost of their space) in the key catalog hot spots and spread hot spots. 2. Don't offer a high percentage, more than 25 percent, of new items. New items are costly and usually have a success rate of only around 33 percent. Make sure you have minimized this risk as much as possible. Keep in mind, however, that as you are mailing more customers and fewer prospects, new items become more important to keeping your catalog fresh. 3. Raise your threshold of success in your item analysis. Make sure that high-profit-percentage and high-profit-dollar items are given more weight than high-demand items. 4. Increase your margin. You should always try to get better margins by buying smarter, negotiating better, etc. You may even have room to raise prices. 5. Increase your AOV with specials, bundles, multiple item discounts, cross sells, etc.
  4. Creative Strategies 1. Maximize the use of space. Try to make room for more items so that every page has a better chance of being profitable. Even if pages are cut, try to hang on to as many products as possible by being efficient with every last square inch. 2. Make sure that all high-profit items are given hero status with the right amount of space, call-outs or other attention grabbers. 3. Work with the merchants to improve your best selling items. Getting a 10-percent lift from your best items is not that difficult and will contribute much more to the bottom line than spending time on new or marginal items.
  5. Operations Strategies 1. Increase your shipping and handling charges, especially at the low end of the shipping chart. This will bring in more revenue, and if done correctly, may deter small, unprofitable orders without affecting your profitable ones. 2. Enforce strict policies on not reducing or eliminating shipping charges to customers who complain, or paying for return shipping. 3. Use a lower-cost carrier, such as a USPS consolidator for outbound packages. 4. Upsell specials and close-outs on the phone. Remember that your marketing expense at the end of the order is $0 (all costs are already sunk). So, a typical company can reduce a product's selling price by 25 percent and still add the same contribution to the bottom line as a full-priced item during this stage of the sale. Use this knowledge to give really great deals on your upsells.
  6. What’s the purpose of your catalog? Is your catalog going to be a front end marketing, back end marketing or combination effort? Why is this important? You need to know the answer to this question, because it will affect how you approach the basics for catalog success: Right market positioning Right merchandise Right position and grouping of merchandise Right graphics Right use of color Right size Right copy Right sales stimulants
  7. Source: New Catalog Launch: Back to Basics; Presented by Jack Schmid, July 1993
  8. This is a partial list of the ways you can build your customer list for either consumer or business-to-business catalogs.
  9. 1. Keep old buyers, old inquires who you are not mailing and put them into the merge purge. 2. Use zip overlays to make subscriber lists work. 3. Create a mini-file (match code) record of prior-mailed names (non-responders) and use a suppress file during the merge/purge. 4. Pre-qualify a name with a phone call or postcard. 5. Track list results with tenacity. 6. Target- segment. 7. Test. 8. Watch seasonality of mailings.
  10. 1. Understand the difference between front end and back end (and middle end) 2. Understand the hierarchy of a customer 3. Test new alternative ways to build your customer list. .. without using the mail 4. Get smarter with your list prospecting 5. Improve the tracking of results ... mail, phone, fax 6. Know (through careful measurement) what a new customer costs 7. Correlate back end (customer) name value with front end name sources 8. Turn around catalog requests (inquires) quickly
  11. 1. Your buyer list is your most valuable asset. 2. Your buyer list is perishable. 3. Your buyer list will outpoll outside lists by 4 to 10 times. 4. How often can your customer list be promoted? 5. When should you merge/purge your buyer list? 6. Rental of your buyer lists - another way to generate income.
  12. This data will help with segmentation strategies.
  13. 1. Date of last purchase - - by three month segments 2. Number of purchases 3. Previous products purchased 4. $ spent with catalog 5. Matching against outside lists 6. Purchased from multiple catalogs of the same company
  14. Needs more explanation
  15. Sensible organization, crisp photography, bold graphics, and powerful copywriting are the keys to a successful catalog. But experienced catalog marketers also use dozens of sales-boosting gimmicks that have little to do with the basics of salesmanship or good copywriting. All we know is that these tricks of the trade work - and that’s reason enough to use them. Here are five that may be helpful to you:   Include a letter. To add a personal touch to your product catalog, write a “personal letter” to your customers from the president of your firm. The letter can be printed inside the front cover or run off on letterhead and bound into the catalog. You can use this type of letter to introduce the catalog, explain your ordering system, state a company “philosophy,” stress your dedication to service and quality, or alert the reader to new, discounted, and other special offerings. Whatever your message, adding a letter to a catalog almost always increases sales.   Bursts. Often used by cereal-makers to alert children to the prize inside the box, the “burst” (a star-shaped graphic with a copy line inside) also can draw a reader to special items within a catalog. Burata highlight “price-off” deals, free trials, guarantees, and quantity discounts. Use bursts and other special graphic techniques (such as underlining, colored or boldface type, fake handwriting) sparingly. Overuse dilutes their effect.   Last-minute specials. Insert into your catalog a separate sheet featuring items added to your product line or discounted at the last minute. Tell the customer these bargains were included just in time for mailing, but too late to print in the catalog. This insert generates additional sales because people like to be “in” on the latest developments.   Give technical information and tips of a general nature. The usefulness of this information will encourage buyers to keep your catalog. And the longer they have it, the more often they’ll order from it. For instance, a hardware catalog might include an article or table titled, “A Guide to Screw Selection.” A filtration catalog could include tips on “How to Clean and Care for Filters.”   Put your catalog in a three-ring binder. Expensive, but people won’t throw out a hardback binder as readily as they would an ordinary paperback catalog. Your customer also is more likely to keep your binder on his shelf because it’s too bulky for the filing cabinet.   Tricks of the Trade: 5 More Sales Boosters For Your Catalog. In addition to using good photography, clear copywriting and sensible catalog organization, throw in a few sales-boosting gimmicks to pull in more orders. The prior issue of B/BCM gave you five of them. Here are five more.   Include product samples. You get two advantages. First, mailings which have three-dimensional objects inside are more likely to be opened than flat envelopes. Second, engineers and other technical buyers often like to play with product samples, keeping them handy on their desks or shelves.   A fine example of this technique was used in a brochure for Gore-Tex, a sealant that prevents leaks in pipe sections when you bolt them together. The sample sealant was stuck to a photo of a pipe flange in the exact position it would be used in real life. The copy told the reader to remove the sample and put it through a series of simple tests (accomplished in 5 minutes at his desk) to demonstrate its effectiveness.   List Your Customers. Include a complete list of all the firms that have bought from you, whether you have 300 or 3,000 names. Seeing such a list in print makes a powerful impression on your customers. They’ll think, “How can I go wrong buying from these guys? Everybody in the world does business with them.”   Include an order form. Make it easy to fill out. Leave enough space for customers to write in needed information. Bind it into the catalog so it won’t be lost/misplaced.   If your products can’t be ordered by mail, include a “spec sheet.” The spec sheet asks the prospect to provide key information on his applications (such as, size of plant, hours of operation, type of process, and so on). With this information in hand, you can specify the equipment the prospect needs and tell him what it will cost.   Include a business reply envelope (BRE). The BRE is a self-addressed, postage-paid envelope the prospect can use to mail the order form or spec sheet back to you. Practically every consumer catalog has a BRE.   Most business catalogs don’t. Business-to-business marketers think, “My prospect works in an office; he has a supply of envelopes and a postage meter handy. He doesn’t care about the cost of postage, and he can have his secretary take care of addressing the envelope.” This may be true, but a BRE still boosts the response rate in business catalogs. Why? Not because they save the buyer 20 cents, but because they flag readers to notice you’d like them to respond to your catalog.   In the same way, a coupon in an ad increases the number of people who phone or write letters. The coupon says, “This is a direct-response ad. A response is the appropriate next step if you’re interested in the product.”   Make it an event. Industrial buyers get a lot of catalogs in the mail, so the boredom factor is high. Anything you can do to make your catalog mailing special, to stand out from the crowd, will boost sales and inquiries.   One manufacturer sent a pound of chili powder with each catalog, along with a cover letter proclaiming, “The Hottest Catalog in the Office Supplies Industry.” With a little imagination, you’ll come up with an approach that fits your catalog and customers.
  16. There are really two types of “call-to-actions” in a catalog. The first group might be called the passive calls to action because they are permanent and provide information on how to contact the company, but do not actively drive the consumer to act. Active “call-to-actions” tend to be temporal and have a time limit, implied or actual, associated with them. Examples of active call to actions: Free shipping on orders if placed by such and such a date Order by such and such a date and receive 1 item free with every item ordered Sale end on such and such a date Today, catalog customers can order three basic ways. They can order via (1) Phone, (2) Website or (3) Mail. Yes, people still order through the mail and they can be some of the best catalog customers in the world. The phone number and website URL should be on the bottom of each page or phone number and URL on alternating pages. The mail order form is usually located in the center of the catalog.