0430 planning next season's catalog circulation

Planning Next Season’s Catalog Circulation

Jim CooganCatalog Marketing Economics

1328 Bishops Lodge RoadSanta Fe, NM 87506

[email protected] 505-986-9902

How have response rates reset as we climb out of the recession?

Catalog response rates have reset meaning that response rates are much more stable and consistent than the were during the ups and downs of the recession.

The good news is we have stability back which allows us to plan future mailings.

The bad news is that response rates are lower than they have been historically.

With response rates the devil is in the details.

Buyers response rates are typically not reset as low as prospecting response rates for most catalogs.

You need to look at your response rates with your most current mailings and compare them year over year to the mailings you are now planning to benchmark response rates for upcoming mailings.

Do not assume response rates will improve over your most recent data.

Consumer confidence and response rates are rebounding slightly. The emphasis is on slightly.

Compare this year to last year for your most current mailing and use that ratio of current response rates to last year’s response rates to same mailing to project response rates for this upcoming Q4.

Consumers are increasingly driven by promotions.

Consumers have come to expect promotions either through your catalog or through e-mail.

So many catalog merchants have had to shift their promotional mix and rely on promotions that consumers now know that promotions are coming.

Your first step is to look at how catalog’s have been performing recently.

Here’s a format for postmortem analysis of your catalog.

Catalog Circulation PostmortemFormat for Analysis

Catalog Name Mail Date Description of Results in a Sentence Photo of Catalog

Actual Budget Last YearVariance

House Buyers Sales Circulation Sales per Book

Prospects Sales Circulation Sales per Book

Total Circulation Sales Circulation Sales per Book

This Year Last YearBudget Orders by Channel Call Center Orders Orders Average Order Sales Mail Orders Orders Average Order Sales Web Orders Orders Average Order Sales Total Orders Orders Average Order Sales

Do you have incremental list universes of house file or prospecting names that can be mailed to above breakeven based on past results?

What are the categories of lists that are proven? What are the types of prospecting lists?

What would be the potential increase in circulation? What would they potential increase mean in terms of sales, catalog costs, number of new customers and type of customers you would acquire?

Is there circulation that needs to be pruned from last season based on end of season analysis of results?

What are the circulation alternatives along the spectrum of business scenarios ranging from no growth in circulation to maximum prudent growth in circulation and circulation scenarios in between?

What is the business model for maximizing profitability rather than maximizing circulation?

What will happen in terms of sales and costs if you maintain the same circulation as last year?

What alternatives are available for getting new customers? Paid and natural search, other web initiatives, etc.

How many web buyers did you acquire last year outside traditional catalog circulation?

How much organic growth can be expected if the circulation remains the same as last season?

What was the growth last year from the previous year in terms of circulation, sales and profitability?

How do you manage your house list of buyers? Can you mail to them more often and get additional growth and profitability from increased promotion to your existing buyers?

How should the house list be pruned for non-responsive buyers? What tools are available to increase the profitability of house buyer mailings especially cutting out older buyers and inquiries who won’t respond? Or have moved?

Should you continue with the cooperative database and is their suite of services worth the requirement to share your buyer’s names?

What is the merchandise risk from maximizing growth? What are the operational risks?

Will the economy support the same results as you enjoyed last season?

What are the changes in catalog breakeven from the postage and paper cost increases?

Summary

Review your most current response data.

Plan for the profitable circulation based on your most recent results.

Include in your circulation plan the promotion plan for your catalog, web site and e-mails.

Consumers are slowly reopening their wallets

Don’t assume you’ll do better than your most current results response rates.

Your buyers tend to start rebuying quicker than the rebound in prospecting response rates. Consider shifting circulation from prospecting to mailing your house file deeper or more frequently.

Use your most current data find the opportunities are potential shortfalls in planning the immediate future of your circulation.