At The Start Of Every Disaster Movie, A Scientist Is Ignored

Last week was an interesting week for me. I did not mention it at the time because it did not seem like a big deal, but my posting last week on Ted & Muffy – A Sad And Cautionary Catalog Tale was the 300th I’ve done for this blog in my six years here at Datamann.

I bring that point up now because that posting had the highest open rate, and highest pass-along (forwards) of all my postings this year. Not bad for mid-summer when many people are on vacation.

In addition, I had 11 new subscribers sign-up the day the posting went out. That may not seem like much, but for a mature blog on a small industry, 11 new subscribers in one day is way cool, and way above average.

But here is what makes this all so interesting: I was writing about a catalog that tried to appeal to a new demographic, and failed in spectacular fashion.  I could see from my email tracking that many of you forwarded that email – probably to advocates within your own company of a similar strategy.

If I had written about some arcane aspect of catalog circulation planning, merge/purge processing or matchback, hardly anyone would have forwarded it, and I would not have gotten so many – if any – new subscribers.

But when I offer evidence of a creative catalog melt down, you jump all over it. It is beyond morbid curiosity – you don’t want the same fate to befall you.

I received an email from a reader that asked why I had waited until I saw Ted & Muffy’s final PDFs to comment on the odd and potentially disastrous creative direction in which they were taking the catalog. Why hadn’t I spoken up when the catalog was planning this new direction? Oh, that question was priceless….

As I’ve said in this space many times before, I’m not a catalog creative person. You would not want to mail a catalog I designed. But that doesn’t mean that after 30+ years of mailing catalogs, I can’t spot a pending disaster.

Mailers – and more specifically – my clients at Datamann, know this. They know I will tell them when they are making a boneheaded mistake. That is why they wait until the final files are due at the printer in less than two hours, to send me the PDFs of their catalogs.

They wait that long because they don’t really want to make any changes. They want affirmation that this year’s fall catalog is perfect. “Bill said it was great!” If I tell them there are problems, just like the scientist at the start of every disaster movie, my advice is usually ignored.

I do have two clients that send me copies of their respective catalogs, when it is pretty far along in the design process, but with still some time to make a few important changes if necessary. They ask me to look at it from a 30,000-foot perspective. I’m not reading copy or checking prices. I’m looking at the catalog the way a consumer would. Since both of these clients are based in the UK and mailing here in the US, I comment on things which they may not be familiar with here in the US.

Both of these mailers know what they are doing. They have been mailing a long time. They are not looking for me to nit-pick their catalog, but suggest obvious omissions or changes that if fixed, would drive response.  Most of time, I don’t find fault with anything. Sometimes, I will suggest changes to offers to make them more responsive to an American audience.

Here is the point. They don’t always agree with me. But, they want a catalog that drives response and drives sales. They usually make the changes I’ve suggested. They are not looking for affirmation of a job well done – they are looking for profits.

Of my 300 prior postings, my favorite was this one I wrote back in 2013 on the 150th anniversary of the Battle of Gettysburg (Pickett’s Charge and How I Became A Catalog Critic). It is the story of how I stood on the sidelines 25+ years ago when I worked at Brookstone and watched our Hard-To-Find Tools catalog be eviscerated. I learned from that experience that most people that want to make major creative and merchandise changes to a catalog don’t have a clue as to what they are talking about. They often don’t even have any “skin in the game”, and don’t have to share in the responsibly if the changes fall flat.

Here are the final two paragraphs from that posting – which are worth repeating:

“Finally, I learned that most people are too afraid, too naïve or not experienced enough to speak up. Business is not warfare. But, we have all experienced similar futile new business efforts similar to Pickett’s Charge. The question is, what do we do about it? As Pickett’s men marched across the Gettysburg field 150 years ago, some of them must have felt that they were doing their duty. Conversely, some of them must have felt that not only was this not a good idea, it was just going to be a slaughter. But those men could not complain – they just had to keep marching. You don’t.  When you see something happening to your website or catalog that just seems like it will lead to disaster, you have to speak up and take action.

One last thought – I have been critiquing catalogs and websites for more than 20 years. In all the speeches I’ve given, and all the catalogs I’ve criticized, I have only received one nasty-gram after the fact – and that catalog went out of business a year later for the reason I cited in my critique.  I have always been fair and factual in my commentary, and never personal. But, I also don’t hold back. You should not either – when your job and your company’s sales are on the line, don’t beat around the bush.”

 

Ya Snooze, Ya Lose – The Joys of Dynamic Pricing

This is part two of why last week was interesting. Sometime in early July, I put a pack of five solar eclipse glasses in my Amazon shopping cart. They were $5. On Thursday August 10th, I finally decided it was time to order them. When I opened my shopping cart, the price was now $20. Plus, my wife, with whom I share my Amazon Prime account, had a put some other stuff in the cart.

I waited until she got home from work that night to confirm she wanted the other items. When I finally went to place the order around 8 PM that night, the glasses were now $25. Plus, they were out-of-stock. They would ship on August 16th, and arrive on August 21 – the day of the eclipse. Since our UPS deliveries from Amazon don’t arrive until about 6 PM, the glasses would arrive about 6 hours too late.

I’ll be at the Datamann office in Vermont that day, probably hoping that it is cloudy, so that I won’t feel like I blew this big opportunity.

 

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

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Mid-Summer 2017 Catalog Observations

It’s the end of July, and you’ve almost finished paginating your Holiday catalog. It’s not going to mail for another two, maybe three months, and there are not many changes you can make to it now.

That’s ok, because it isn’t your catalog which you should be changing. It’s your website that you need to work on.

Beyond The Upsell:

When I worked at Brookstone in the 1990s, we spent a lot of time coming up with just the right products for our “telephone upsell” list. You have to remember, this was before the internet, when 50% of our orders came in over the phone. At the end of the order, the CSR would ask the customer if they wanted to hear our list of daily specials, which always included a quart of maple syrup. We argued endlessly over what was the best way to spiff the CSRs for the upsell effort. We argued whether the “specials” should be good products, or overstocks we were trying to get rid of.

Most of you have adopted a variation of upsells on your website with features such as “Customers who bought this product, also liked these products….”

There is nothing special in the list below from FineArtAmerica.com. They take the basic product I was searching for (a poster of Napoleon Crossing the Alps), and show it to me in a variety of options such as a canvas painting, acrylic print, etc. In 2017, you expect different options like this for a poster/print/photo.

But further down, you can see they offer this image of Napoleon as a shower curtain, pillow, phone case, coffee mug.

Lots of you with gift catalogs spend an inordinate amount of time finding/developing new products with witty sayings, or cute images, like a smiling cat, or a mug that says “You Are An Amazing Woman”. But you squander the opportunity to really drive sales for that product because you think only in terms of ONE option for that product.

I hear many of you that sell products which are “nice to have” complain that you depend on consumers looking through your catalog to “discover” all the great new products you have. The future of catalog/ecommerce is going to belong to the companies who can capitalize on taking a great product, and turning it into 100 different options. Consumers will shop the sites where they know they have the most options. That’s why I love Cafe Press – contrary to what catalogers tell me – that “no one browses a gift website!”, I do browse their site (where else can you get a “Nixon in 2020” t-shirt?).

If you are a gift cataloger, stop thinking so one-dimensionally about your products, and think about how you can turn that great new t-shirt with the Walt Whitman quote into a phone case too.

Not In 100 Years:

Is this good catalog upselling, or foolishness? I spotted the item below in the Garrett Wade catalog, and then checked it out on the website. It’s a standard kerosene lantern. I have similar lanterns that have been in my family for more than 100 years, and which I have used repeatedly every summer for the past 50+ years. In all that time, I have never had to replace a wick.  But, Garrett Wade offers 10 replacement wicks for $5.95. Unless you were living in a bunker, and needed to use this lantern pretty much 24 hours a day, I can’t see why you would ever need so many replacement wicks.

Was this just great upselling on the part of the merchant? ($5.95 for 10 wicks is actually a good deal). Was the merchant hoping that the average person buying a kerosene lamp would not know that they didn’t need that many wicks? Or did the buyer himself not know that?

I’m not going to give Garrett Wade too much grief on this, as they do something that most of you don’t do, which is an absolute missed opportunity for you. Right below the offer for the lamps above, they have a link to a video on how to use the lamp. (Ok, maybe if you don’t know how to use a kerosene lamp, you might think you do need 10 replacement wicks).

The video is 1 minute long, I can tell it was not “professionally” produced, but it shows the product in use, and is actually pretty good! It sits right on the Garrett Wade website, so doesn’t send me off to YouTube to watch. Why aren’t the rest of you producing similar videos to showcase your products? Think about how much time people watch videos on their phones – video enhances the sale. You are too concerned about “getting it right”, or that fact that it will look “homemade”. So what? It helps sell.

My only concern with this particular video is that it fails to do any selling – while the guy is filling the tank, he could be telling the viewer how well built it is, that it won’t rust, it will last 100 years, etc.  Consumers still need to be sold. Don’t squander the opportunity. Always Be Selling!

As My Mother Would Have Said – “What Gall!”

I love my local daily newspaper (The Keene NH Sentinel). But over the 30 years I have been a subscriber, the paper has announced a number of “editorial” changes, which you could tell were only meant to keep the presses rolling. A few years ago, they announced they would no longer devote as much space to national and international news. Then sports reporting was cut back, and of course like all newspapers, there are no longer any classified ads in the back.

The kicker came this week via a letter they sent to all subscribers announcing a price increase coming this fall. The best part was this statement: “Due to the size of our premium Thanksgiving edition, there will be a $1 surcharge for this Premium Edition”.

This “Premium” Thanksgiving issue, which actually comes out the day before because the paper does not print on Thanksgiving, is all ads and FSIs. Sure, there are a few extra articles on alternate ways to cook a turkey, or the joys of a vegan Thanksgiving, but beyond that, it is all ads. So, for the pleasure of getting a ton of print ads for which the newspaper is already being paid, my newspaper is now going to charge me $1 extra. What gall!

But, hold on! Can that concept be applied to your catalog? Most catalogs have always had a vendor co-op program where you charge vendors a token amount for appearing in the catalog. What if you took that concept further and charged the vendor the full cost of appearing in the catalog? What if you paid for the entire catalog this way? I know many of you are thinking “Bill has no idea how hard this would be”, or “that won’t work for apparel catalogs”.

Don’t think in terms of 64 pages. Think in terms of 8 pages. What if you got an eight-page catalog completely paid for by a vendor(s)? You could prospect pretty deep if the marketing cost was $0. And, think about this – just as you are getting hammered by Amazon, many of your vendors are feeling the pain of all the retail store closings. They are looking for new markets, and may very well be receptive to helping you, if you grant them exclusivity, or if you agree to promote a new line which they are testing.

Oh, I know – you can’t do this because it would interrupt the flow of catalogs you already have, and potentially cannibalize sales from your Holiday 2 drop. Stop thinking that way. Think in terms of using a vendor-paid-for mail piece as a way to drive consumers to your website. The more baited hooks you have in the water, the more you will catch.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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What Happens To Catalogs When …

This posting is part 3 of What Is To Become Of Single Title Catalogs – Revisited 2017.

There is a great scene in the 1967 movie Guess Who’s Coming to Dinner? that speaks to where the catalog industry is today. In case you don’t recall, or have never seen the movie, Katherine Hepburn and Spencer Tracy portray a married couple whose 23-year-old daughter wants to marry Sidney Poitier, who plays the role of a black doctor, and who is equally in love with their daughter. This movie was a big deal because interracial marriage was still illegal in 17 states when it came out.

The movie takes place during an 8-hour period, as the parents of Sidney Poitier’s character, and Hepburn and Tracy, are all trying to come to grips with the idea. At one point, Spencer Tracy is talking with Beah Richards, the actress playing Poitier’s mother. She is trying to understand why her husband and the character played by Spencer Tracy are both having such a problem with this planned marriage. Tracy’s character is opposed to the marriage, and Sidney Poitier has already stated that unless he approves, there will be no marriage. Poitier’s mother says the following:

What happens to men when they grow old? Why do they forget everything? I believe…those two young people need each other…like they need the air to breathe in. Anybody can see that by just looking at them. But you and my husband might as well be blind men. You can only see that they have a problem. But do you really know what’s happened to them? How they feel about each other? I believe… that men grow old. And when sexual things no longer matter to them, they forget it all. They forget what true passion is. If you ever felt what my son… feels for your daughter, you’ve forgotten everything about it. My husband too. You knew once… but that was a long time ago. Now the two of you don’t know. And the strange thing… for your wife and me…is that you don’t even remember. If you did…how could you do what you are doing?”

When Catalogs Grow Old:

What happens to catalogs when they grow old? Why do they forget? Why do they lose the passion that brought about their being in the first place and made them successful?

The retirement of Mikey Drexler as CEO of J Crew is, as Kevin Hillstrom stated, is the end of an era. He was not only a great retailer, but a greater cataloger. His departure is an opportune time to reflect on what is happening as catalogs grow old.

I can remember going to DMA Catalog Conferences in the 1980s and 1990s, and there were always one or two great catalog “personalities” that gave keynote speeches. They didn’t talk about how they were using retargeting to drive a 2.8% lift in response.   They did not talk about their cloud computing systems. They talked about their passion for the merchandise they were selling, and the passion they had for their customers.

Most important, they talked about how there was always another dragon to slay – their personal quest was to make the catalog a great place to work, a great place for their customers to purchase products, and a successful company (meaning: profitable). The quest was all about slaying the next dragon, and the next, to accomplish all these goals, and have peace in the kingdom.

Today, catalogs seem to have as much interest in their customers as United Airlines does for its passengers. Today, it is about catching the prey, and making them pay. There is no focus on who the customer is and what the customer wants. The co-ops have an algorithm that finds viable names for you to mail. But, do you really know what those prospects value in you? Do you know what those buyers really want from you?

The quest is gone. As Beah Richard’s character says, “You have forgotten what true passion is.” For catalogs, there are still dragons to slay, but most catalogs have given up, leaving someone else to slay them.

The reason the quest is gone has two parts:

First, remember the old saying about buying computers, that “no one will ever fault you for buying IBM?”  It was the safe choice. There is an equivalent in catalogs today. It is to be predictable. It’s always easy to do the predictable. If the predictable doesn’t work, no one is going to question or blame you, because it is what you are supposed to do. If it doesn’t work, it must be the fault of the economy, weather, or Amazon.

Look at these recent catalog covers. They are predictable.

Just looking at three covers from each company you might not think that. But line up a year’s worth of these covers, and you will see that they are not only boring, but have no passion. It is not just the covers either, but the whole tired product assortment and direction of the catalog. The original founders of these titles had passion, but passion is a luxury they can no longer afford, as passion requires you to break the mold and test new things that run the risk of not working.

In the three examples above, it is easy to see my point about passionless catalogs just going through the motions to keep the presses rolling. But be honest – are your catalogs any different? When was the last time you had a customer contact you and say, “Wow, I really love what you are doing with your catalog. I can’t wait for it to come each month”?  Conversely, when was the last time a customer said, “Man, I really hate what you are doing now”? Either response from a customer would show that there was still some interest out there, and that they were at least looking at your catalog, as opposed to their phone. But I’ll bet that if you are honest, it’s been quite a while since you received either one of those types of comments. That what being predictable will get you.

The second reason that the quest is gone is that most catalog companies rely upon one thing for their continued survival – efficiency. Catalog production follows a very rigid, tight schedule which pervades almost everything a catalog does. Can’t miss a deadline at the printer, can’t risk having the books go out late. Can’t try anything new, can’t risk not making the budgeted goal for the year (even if the goal is 5% less than last year).

The big catalog conglomerates (BluStem/Orchard Brands, Potpourri Group, Cornerstone) keep acquiring more catalog titles because it makes their investment in efficiency even more profitable. But, you never see other catalog companies purchase online-only companies because those types of companies would not fit into their efficiency model – there is no synergy, no gains in productivity. “If their customers are online only, I can’t mail them a catalog, which is not going to help my co-mail pool savings, so why would I want to acquire a company like that?”

That line of thinking makes Amazon’s purchase of Whole Foods all the more intriguing. There are multiple dragons in this deal for Jeff Bezos to slay. His quest is just beginning, while many of you feel your quest is nearing twilight.

Can you learn to love selling without a catalog, by using all the tools of ecommerce?  Can you get the passion back? The first thing to do is to stop being so predictable. Then stop worrying about being so efficient.

“You knew once… but that was a long time ago. And the strange thing…is that you don’t even remember. If you did…how could you do what you are doing now?”

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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What Is To Become Of Single Title Catalogs – Revisited 2017 – Part 1

Based on comments I received at the time, one of the most read and most popular series of blog posts I’ve written were on what is to become of the single title catalog, written in late 2014/early 2015. Click here for  Part 1, Part 2, Part 3,  Part 4.

Because there was such interest in the topic, and because the catalog, retail and ecommerce landscape has changed so much in just the last two years, I decided to revisit the topic, and look at where the catalog industry and single title catalog companies are headed in 2017.

(Note: as was the case in my first series of postings on this subject, I’m focusing on catalogs doing between $5/10 million to $100 million, and they are companies which may have more than one catalog title, but they are not part of a major catalog conglomerate).

In general, I’m a bit more optimistic today than I was in 2014 for some titles. There were single title catalogs doing well two and a half years ago, and even more are taking steps today to ensure their survival – maybe not indefinite survival, but they will live to fight another day. There is a greater awareness today which was not as prevalent in 2014, that catalogs must change or die.

The Catalog Malaise:

However, the majority of single title catalogs – regardless of their best intentions, are not healthy. Here are some of the symptoms I see:

  1. Little to no growth of catalog/web sales on flat circulation;

 

  1. Ever so slowly declining response rates to both house and prospect mailings, creeping down a bit every year, a trend which started after the 2008 recession, but which has not ceased.

 

  1. Prospecting with the four remaining co-ops has plateaued for almost every mailer, due to the continual decline of the co-ops’ performance and shrinking volume of viable co-op names which I’ve written about many times previously. What has changed in 2017 is that I rarely receive any argument from mailers now that this is occurring, and mailers find incredulous the co-ops’ counterargument that the co-ops are actually growing.

 

  1. As circulation flattens, or declines, product margins continue to erode, as mailers lack the ability – or the fortitude – to commit to inventory quantities necessary to get volume discounts.

 

  1. Smaller, ancillary titles that were started 10 to 15 years ago because they seemed like a great brand extension at the time, but which today are simply bleeding losses, are being shut down.

 

  1. CEOs are being fired or let go with greater frequency and after shorter tenures. They are being given a short leash to fix what’s wrong, or are bounced quickly.

 

  1. For even successful catalogs, there are across the board reductions in staff, with the remaining staff often not having any “catalog” experience.

 

  1. With budget allocations moving toward web development, legacy “catalog systems” (be they marketing, merchandise or order processing systems) get left in place, which causes the mailer to fall further behind.

 

  1. Prior to the recession, every time I visited a client, either the CEO or VP of Marketing would pull me aside and say in hushed tones “We are looking to acquire another title. Let us know of anything that is for sale”. Of course, they always thought they were the only ones asking me this. Hardly anyone asks this anymore.

 

All of these symptoms of “catalog malaise” lead to more challenges.  Most mailers know deep down inside that improved merchandise performance, and new products, are the two key ingredients to lift performance. But developing a “sound merchandise strategy” takes time. So, the focus invariably becomes “what can we do immediately?”

The “immediate” fix usually leans towards marketing – and often that means pursuing a series of short-term response tactics/gimmicks:

  • Mailers go down the rabbit hole of offering discounts and offers, and often much earlier than what passed previously as “normal”. A cataloger that previously could hold off until August to have a “Summer Sale” is now offering 30% of the entire catalog in May.
  • Mailers end up working with too many vendors that are “one-trick” ponies, that have one “product/service” that is the “game-changing disruptive technology” du jour. In reality, although these product/services are successful, they only move the response rate by a fraction, or result in acquiring only a handful of new customers. Lots of noise and distractions for little results.
  • Or, the company decides that in order to attract a “younger” customer, they need to update the brand. So, major resources of time and money are spent – wasted in my opinion – on new brand/creative initiatives which typically fail, since they never generate any significant increase in response. The reason for failure is that management acts on their gut instinct, or on the basis of “best practices” fueled on advice from consultants, but neglect to consider the one certain source of information that would be helpful – they never talk with their customers.

As previously mentioned, some catalogers are doing well. They are focused on merchandise productivity. Yet, every catalog/web company exhibits some of these “traits of malaise”. There are few within the industry that see a rosy future for the print catalog going it alone.

Of course, in many companies, there is a line (in some cases, it’s a wall) between what is being done in print and online. Consequently, even if your online team is doing a great job with developing dynamic pricing, adoption to cart programs, and a great mobile site, the catalog is still the dominate force within the company. As one client said to me recently “We are struggling with becoming “Digital first”. The print catalog permeates everything every department does (merchandise schedules, catalog production meetings, operations, finance and even HR).  It’s EXTREMELY difficult to get through even one meeting without saying the word CATALOG.”

What are the options? That’s where we will pick up next time.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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If I Were You

Right after our catalog seminar a few weeks ago, I received a number of emails from attendees thanking me for the event, expressing their enjoyment with the presentations, suggestions for next year, etc. All good stuff and all sincerely appreciated.

(For My UK readers – please see the note at the very end of today’s posting).

One attendee, a vendor, wrote that “I totally get that it is fun to pick on vendors and the bright, shiny objects that we are peddling.  But as a former mailer/digital marketer, I am keenly aware that understanding the advances in technology and what they mean to my business prospects is critical.” He went to say that our seminar in the future could be a “neutral ground” to “educate marketers on what technology makes possible, and teaches (forces?) them to think about how they can leverage the technology advances to grow their businesses”.

A neutral ground? Hmmm…

How would I manage to have a neutral ground if I allowed one vendor to promote their “shiny new objects”, while denying that opportunity to others?  I couldn’t, and I’m not even going to try.

Our catalog seminar each March (you can circle March 29, 2018 on next year’s calendar) is almost a year-long undertaking for me, so I’m glad attendees found it worthwhile. I’m delighted when they take the time to write with suggestions.

But I believe the success of our event lies in not promoting “specific” new technologies or new methods of using old technologies. Rather, it lies in helping traditional catalogers see how they must evolve their business in general to stay competitive. Whether it is thinking less like a cataloger, thinking more like an ecommerce or even mobile marketer, or how to confront the reality of Amazon, our seminar will continue to offer more generic solutions that are timeless, rather than the bright, shiny new object that will be obsolete in a year’s time.

If I Were You

I have not been to the Internet Retailer Conference (IRCE) in a few years, but one of the things I always enjoyed about their conference was that it featured speakers talking about the newest/greatest technology. IRCE made little effort to screen speakers and keep them from giving a pitch for their product.  My feeling on this is that the online technology is changing so quickly, you have to have a forum like IRCE where the latest and greatest is presented, even if the presentations tip too much toward being a sales pitch.

Since there is no way Datamann’s seminar (which we host for the VT/NH Marketing Group) could ever offer the breadth of information on new technologies that are offered in the hundreds of presentations at IRCE, why even try?  At IRCE, let the buyer beware, just as catalogers had to pick our way through the maze of vendors and presentations back in the 1980s at the Catalog Conference.

If I were a catalog mailer today, I would attend the IRCE, with my eyes wide open. I’d look for every cool new idea, and zero in on the ones where the presenter/ vendor offered proven examples of how their technology could help me in the next three to six months.

When you are attending a conference with 15,000 other attendees, it is impossible to digest everything at once. But trust your gut instinct on who seems to have a believable story. Years ago, Ben Perez, my former boss at Millard Group, used to say that “some things just smell like 3 day old fish”. You’ll be able tell which vendors are pushing three day old fish, and which aren’t.

Learn to be skeptical. Here’s an example: at the NEMOA conference in March, the Postmaster General was a no show. She sent one of her trusted deputies in her place. He gave an overview of issues the postal services is dealing with, and the new services being offered. Plus, he provided some interesting statistics, one of which is that although since 2012 mail volume is down, “engagement with mail was up, with an additional 25% of households reporting a strong attachment to mail.” So what does that mean? What is a strong attachment to mail? How do you quantify that? How did they determine that “attachment” was up 25% in the past five years? Learn to be skeptical.

In addition, keep a check on your enthusiasm when you get home. As one person wrote to me before our seminar last month “I wanted you to know that although I will not be attending your conference, it’s (IMHO) the best in the business. I am not attending to allow two other staff  to go. Your other reader is absolutely correct, most conferences are a “vendor cesspool” and I welcome the day a newbie (or seasoned marketer for that matter) returns from the typical national conference with more than unbridled enthusiasm for some new start-up that plans to further squeeze our dwindling profit dollars. “

Finally, to my many subscribers in the UK, if I were you, I’d plan on attending the Direct Commerce Association’s Annual Summit (click here) on June 15 at the Hurlingham Club in London. (Awesome looking venue!).  Kevin Hillstrom will be presenting a new and improved version of the business simulation he presented at our seminar last month, and Amy Africa will be presenting her latest take on “The good, the bad & the downright ugly” of websites. Kevin and Amy together, in London – Wow!

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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It’s All Crazy Until It Isn’t

If you were there, you know how great last week’s Datamann catalog seminar turned out – by most accounts it was awesome! If you weren’t there, I’m going to share a few key observations.

Rather Lose The War Than Admit The Mistake

In my presentation, I gave a list of issues, internal and external, that catalogs are suffering. I also gave a list of things which I feel the catalog industry wrongly pursued over the last 20 years, which allowed ecommerce companies to gain the upper hand. Among those pursuits was that as an industry, we became too dependent on the catalog co-op databases.   If you are a steady reader of this blog, you know that I feel the co-ops have been detrimental to our industry – but few of you acknowledged it. You preferred to continue blindly supporting a declining source of names for your customer acquisition purposes, than admit the mistake of that pursuit. Until now.

At the seminar, I had a simple, one question survey asking what two topics attendees wanted addressed for 2018. We had almost 50% participation to the survey (I think that is pretty good, don’t you?).  Guess which option received the least votes?  “Working with catalog co-ops” was in a tie with “PPC/SEO” for dead last, with only two votes each. Five years ago, “working with the co-ops” was number one.

At last, I feel that you understand that your future lies in taking a new path, breaking the mold and going against conventional wisdom. Some of you have been pursuing customer acquisition that did not rely on the co-ops for years, but the majority of the industry did not follow.

Of course, there is one fly in the pudding (old New England term). This is how the people at the seminar ranked the importance of co-ops. It may not match the reality of what they encounter when they return to work on Monday. That’s when they will meet the forces of gridlock within their companies that want to preserve the status quo, and not make any “dramatic” changes. It’s all crazy until it isn’t.

I Don’t Know The Ground Ahead:

Only Kevin Hillstrom could have done this. Kevin designed an incredibly complex, yet simple to understand, business simulation in which all of the attendees took part. Since Kevin will be writing about the exercise in his blog this week, I’m going to defer to his recounting of the experience and the outcomes. I thought it was awesome. The lesson learned: you already have all of the data and metrics you need to make decisions, but your actions are more important than the data.

I also thought the “group dynamics” were great. I’ve never seen a room full of seminar attendees get so involved in a project. It certainly was a bit more stimulating than doing some magic tricks with a piece of newspaper. The photo below is of my team debating our pricing and discounting strategy.

There was one aspect of Kevin’s simulation that was something that many participants probably did not fully appreciate. At the end of each “round” of the simulation, you could see what your competitors had done, and how it worked for them. In real life, you rarely have such transparency into the actions of your competitors.

As General Lee worried on the eve of the battle at Gettysburg, “I do not know the ground ahead”, most mailers today simply don’t have the time or resources to track the activities of their competitors. Some will argue that it is not important, that you have to run your business without the benefit of market research on your competitors. But Kevin’s exercise certainly reinforced that it is easier to take decisive action when you know the ground ahead, and what the competition is likely to do.

Note: Kevin and I exchanged emails on Saturday afternoon, and he is already working on improvements to the simulation based on feedback he received from attendees in Concord! I see a Kevin Hillstrom Business Simulation app in the future.

The Database for Merchandise

Frank Oliver was on. Loud, motivated, animated, funny and dead-on target with his advice. Frank got into the nitty-gritty of merchandise metrics, and the tools he uses to be a great merchant.  Fortunately, the main portion of his presentation echoed one of my key metrics (always good when two speakers agree on something) which was the need to track merchandise performance over time. Frank reinforced that you can’t rely on your ERP system, or mail order processing system for that tracking. Instead, he showed his offline “merchandise database”, of which I’m sure many in the audience were envious.

But it takes time to develop a database as Frank described. Frank shared with me after the seminar that it took him several years to get the data assembled to make that database worthwhile.

A Show of Hands

Every year, I ask for a show of hands on several topics. The results are always telling. I asked how many companies had grown by more than 5% in 2016. I’d say less than 20 of the 160 catalogers attending raised their hands.

About 10 or 12 years ago, I gave a speech at NEMOA, and asked how many people had made a purchase using PayPal, which at the time I used frequently and not just for eBay purchases.  As I recall, only 3 or 4 people raised their hand. I also asked how many people were Prime subscribers on Amazon, and about 5 people (out of several hundred) raised their hand.

Last Thursday, I asked how many were now Amazon Prime subscribers. Almost the entire room raised their hand.

Which brings me to two key comments made about Amazon. During the question period at the end of the day, Kevin stated that he was tired of all the whining about Amazon. He reminded the audience that as marketers and merchants, you get paid to figure out how the deal with the competition, so do your job, and figure out how to beat Amazon.

The other comment came from a mailer who pulled me aside, and confidentially told me what his catalog was doing to take advantage of – not fight – Amazon Prime. I’m going to honor his request and not reveal what they are doing, but as he said “Don’t be afraid of Amazon. Embrace it and own the strategy. It is the future!”

I have always been Amazon agnostic. Some of our clients have done well there, others have not. My point on Amazon has always been that the customer activity on Amazon – which we as consumers now almost universally support as Prime members – was not flowing back to the co-ops, and was leading to the co-ops’ decline. I’m thinking that “working with Amazon” is going to be a theme for the 2018 seminar.

Seminar Tidbits:

I’m always taken aback when I’m giving a presentation and someone uses their cellphone to take a picture of one of my slides. And then I realize that I forgot to post the slides ahead of time. So, you will be getting an email from the VT/NH Marketing Group with a link to all three presentations.

One of those taking a picture of one of my slides told me he had taken a shot of this slide, and sent it back to his co-workers that had accompanied him to a recent conference where every speaker had promised that they would in fact, “transform the enterprise with their disruptive technology”.   Sometimes, vendors just don’t know how foolish they sound.

I want to once again thank my two co-presenters, Frank Oliver and Kevin Hillstrom for their hard work and efforts in making the seminar such a success.

Finally, as I write this Saturday afternoon, it is snowing hard at my house in Dublin, NH. We are expecting a foot of new snow by the end of the day. For the 4th year in a row, we beat a snowstorm by one day, and everyone got out of town safely. See you in 2018!

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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