Virtual catalogs have break-even response rates on par with emails, as opposed to breakeven for traditional print media, which is one or two orders of magnitude higher. Here are two examples:
- If you have 100,000 email addresses and a virtual catalog costs $1,500 for each edition, what's breakeven on emailing a link to the virtual catalog announcing the publication of a new print edition? If your margin is 50 percent, that email needs to generate $3,000 in sales to break even. If the average order is $100, that's a total of 30 orders. So you need a response rate of .0003 percent.
- If you post a virtual catalog on the homepage of your website and need 30 orders to break even, then you need one order per day for the first 30 days of the life of the catalog.
With two primary ways to promote your virtual catalog — via email and posting its icon on your homepage — your break-even response rates are very low. Factor in all the different ways your virtual catalog can generate traffic and orders, and breakeven should be easily achieved for most marketers.
Virtual catalogs have the potential to break the cycle of consumers’ addiction to email promotions. Wean customers away from “waiting for the next promotion” by sending them sale fliers, postcards, insert formats, clearance offers and overstock fliers that are multiple-page formats that can be emailed as digital editions.
The goal is to replace discounting with merchandise-laden pieces with multiple pages — but less than a full-length catalog. This allows cross-channel marketers to liquidate overstocks and clearance items without having to give blanket discounts on everything.
Virtual catalogs aren’t the silver-bullet answer to all direct marketers’ problems, but they are like email on steroids. They're very inexpensive, the technology has finally arrived and they'll drive measurable, incremental sales for marketers.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. Reach Jim at (505) 986-9902 or jcoogan@earthlink.net.
