Strategy: Catalog Circ Planning Will Never Be the Same Again
Redefine your contact strategy by redefining the role of the Web
December 2008 By Stephen R. Lett
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Catalog circulation planning has changed forever, and knowing how to use your marketing database across all channels is the key to success. In today’s multichannel marketing world, contact strategy is the way to the promised land, while planning channels in isolation is the wrong approach. So how can you adapt to changing multichannel tactics efficiently and affordably?
Your Challenges
Significant changes have occurred that make planning circ now more difficult than ever, and many once-proven methods are no longer effective:
1. Tracing source codes. Catalog nontraceable factors have increased 20 percent to 60 percent or more, creating the need for regular matchbacks.
2. Internet factors. We’ve progressed from catalog marketing programs to multichannel marketing programs, necessitating a contact strategy approach to marketing planning.
3. Lower response rates. There’s no question response rates have declined due, primarily, to increased competition on the Web and dependence on prospect names selected from one of six co-op databases. This necessitates aggressive promotions, such as “free shipping,” which impact costs and profit margins.
4. Increased marketing costs. Paper prices have increased more than 30 percent in 18 months. Postage costs, which skyrocketed a year and a half ago, continue to rise. Increased expenses are eroding the bottom line, all of which creates a need to use the Internet more.
The New Database
Traditional catalog company operators who know how to use their databases effectively across all channels will be successful. Customers of multichannel marketers spend an estimated 30 percent more than those of single-channel sellers. The one-message-fits-all-channels approach no longer works. Relational databases must be designed to incorporate and allow analysis of data from multiple channels because each channel presents different opportunities and challenges. Tailor your message to the medium.
One way to test a channel-specific theory is a contact strategy test. This helps you determine if your Internet-only buyers should be mailed, and if so, how often. This test takes place over a three- to six-month mailing cycle; therefore, you won’t know your results immediately.
Create three or more test panels of Internet-only buyers. In your first mailing (drop one), mail to all three groups. In drop two, only mail to a panel, A. In drop three, mail to panels A and B. If mailings are sent every six weeks, it’ll take 18 weeks to complete all drops and even longer to read the results.
Your Challenges
Significant changes have occurred that make planning circ now more difficult than ever, and many once-proven methods are no longer effective:
1. Tracing source codes. Catalog nontraceable factors have increased 20 percent to 60 percent or more, creating the need for regular matchbacks.
2. Internet factors. We’ve progressed from catalog marketing programs to multichannel marketing programs, necessitating a contact strategy approach to marketing planning.
3. Lower response rates. There’s no question response rates have declined due, primarily, to increased competition on the Web and dependence on prospect names selected from one of six co-op databases. This necessitates aggressive promotions, such as “free shipping,” which impact costs and profit margins.
4. Increased marketing costs. Paper prices have increased more than 30 percent in 18 months. Postage costs, which skyrocketed a year and a half ago, continue to rise. Increased expenses are eroding the bottom line, all of which creates a need to use the Internet more.
The New Database
Traditional catalog company operators who know how to use their databases effectively across all channels will be successful. Customers of multichannel marketers spend an estimated 30 percent more than those of single-channel sellers. The one-message-fits-all-channels approach no longer works. Relational databases must be designed to incorporate and allow analysis of data from multiple channels because each channel presents different opportunities and challenges. Tailor your message to the medium.
One way to test a channel-specific theory is a contact strategy test. This helps you determine if your Internet-only buyers should be mailed, and if so, how often. This test takes place over a three- to six-month mailing cycle; therefore, you won’t know your results immediately.
Create three or more test panels of Internet-only buyers. In your first mailing (drop one), mail to all three groups. In drop two, only mail to a panel, A. In drop three, mail to panels A and B. If mailings are sent every six weeks, it’ll take 18 weeks to complete all drops and even longer to read the results.
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