Strategy: Master the Analytics of Page Count

And know what to do with all that information

October 2008 By Stephen R. Lett

multipage

When I taught direct marketing at Indiana University, I told my students to write “merchandising” if they didn’t know the answer to a question so they could receive 50 percent credit. I wanted these second-year MBA students to know the importance of merchandising. But product selection and circulation determine the success of any catalog/Internet business. And knowing how many pages to circulate is my topic this month.

Specifically, I’ll explore the following:
• What basic criteria determine proper page count?
• What are the economics of adding pages?
• How can adding pages be a successful strategy in these difficult economic times?

Adding pages, and thereby selling more products to existing customers, is always a good strategy. The favorable relationship between page cost and actual returns per page generates a high return on investment. The cost to increase pages is approximately half the percentage increase in selling space. Increasing from 52 to 60 pages, for example, yields a 15.4 percent increase in square inches of selling space, yet the cost increase is approximately 7.4 percent.

Playing the Inches
Successfully adding pages means maintaining proper page density. Don’t devote more space to the items being added. And don’t give more space to existing products simply to fill more pages. To make the economics work, maintain proper density. If you typically put eight items on a page, maintain that same density on your added pages.

The idea of creating a smaller prospect book full of best-selling pickup items is appealing. You might think it saves money and in theory has little, if any, impact on performance. However, in practice, this usually isn’t the case. A catalog of best-sellers might perform so well that it counteracts the falloff due to a lower page count at first. But prospects tire of seeing pickups. When prospecting, you select many of the same names over and over. In fact, if you’re actively mailing prospects, some see your catalog as often as your housefile sees it. Therefore, it’s important to introduce new items to stimulate sales.

Whether you’re considering a smaller version of your catalog, including new and pickup items, or a “best of” book, you can use the rule of thumb (in reverse) to recognize that you’d generate half the percentage increase in pages in increased sales. For example, if you increase your page count by 10 percent, you’ll see sales increase roughly 5 percent. And just as you improve performance when you add pages, performance will decline if you reduce pages.