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Letter-Rate Catalogs Are Right for Today

May 25, 2010 By Scott Reed
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The era of profuse consumption is over — smaller cars and skinny jeans are in. Similarly, retailers are pulling out all the stops to eliminate waste and reduce costs. Major catalog marketers nationwide have hopped on the “tighten your belt” trend, with an increased demand for smaller, letter-rate catalogs. Dropping millions of large catalogs to underperforming mailing lists is passé, while green design and consumer perceptions are hot, and postage is at an all-time high. 

Additionally, the U.S. Postal Service has recently announced changes to its Eligibility for Commercial Flats Failing Deflection. The new standards, which go into effect June 7, allow for one inch less of vertical deflection than is currently allowed. The following outlines why it's time to downsize your one-size-fits-all catalog:

First, have a look at your data; response analytics provide great insight. Targeted print not only drives higher average order size, but also coveted online sales. According to the Direct Marketing Association's "Statistical Fact Book" (pg. 62), orders from printed material provide great spike over purely e-commerce driven sales. Data-driven versioning and testing strategies are no longer an issue with most printers. Marketers can now split and version to their hearts’ desire to greatly boost return on investment and steer traffic through their preferred channel.

Second, examine your own mailbox for tips and tricks from marketing leaders. Retailers such as Costco, Target and others are increasingly looking toward letter-rate “sale books” to help drive key SKUs. Meanwhile, many other national retailers have cut back their catalog pages in favor of smaller, more time-sensitive sale catalogs. Recently, my firm helped a client convert its existing 52-page, full-size catalog to a letter-rate, 12-page format as its new control.

Post-mailing results illustrated an increase in response and overall ROI. More specifically, we conducted a product affinity analysis to determine the most popular products selling, then repositioned those items into the smaller format. The 12-page catalog achieved a 7.5 percent response rate — an increase of 6.3 percent from the 54-page catalog — and an overall increase in ROI of 31 percent. As a result, sales per catalog increased 3.5 times, in addition to the savings in cost from producing a 54-page catalog vs. a 12-page letter-rate sale book.

Finally, letter-rate catalogs can direct consumers to make purchases via phone, mail or online. Data analytics performed on the aforementioned converted 12-page catalog revealed an increase in online response rates from .65 percent to 2.6 percent — a 400 percent increase.
 

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