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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The Most Dangerous Number in Catalogs Is Getting Bigger

So, you got your wish. The US Postal Service is changing the most dangerous number in cataloging – and they are making it bigger.

That number is 3.3, which is now growing to 4.0.

3.3 ounces is the cut-off established by the United States Postal Service many years ago at which standard (bulk / 3rd class) mail can enter the mail at the “piece rate”. So, it doesn’t matter whether you mail a 12 page catalog, or a 64 page catalog, as long as it is under 3.3 ounces, the postage is the same. Go over 3.3 ounces, and you pay the piece rate and a pound rate.

In 2017, the USPS is giving you an incentive to mail more, and that number is moving up to 4.0 ounces, a 21% increase.

I’ve seen several references online that this is a huge opportunity for catalog mailers, as they can now increase the trim size and/or page counts of their catalogs, or print on more expensive, better quality paper, and the postage is FREE. Ah, yes, the siren call of free postage. Think of the possibilities for your catalog circulation.

You can add more pages of products. You can add more branding pages.  You could even leave some pages blank, and it will not cost you anything more in postage.  You’ve been told for years – correctly – that postage is the most expensive part of mailing a catalog, so this is a gift from the postal gods, right?

Well, not so fast. As one of my clients commented to me recently, “Great, I know what you are going to say. Now I can add 12 more pages of incrementally lousy performing merchandise.” (It’s great that clients are starting to pay attention, and know what I’m going to say.)

Here is the problem as I see it:  Most catalogs are run by managers/ directors / owners that have been doing this for a while. It doesn’t matter their age, what matters is when they started in this industry.   Let’s assume that most of them have been working in catalogs since 1992. Back 25 years ago, there was no internet that impacted consumer or B2B catalogs.

But the internet, mobile and social media are not the problems facing catalogs today. The problem is risk and the unknown. Back in 1992, most consumer catalogs had a 92% known source code capture rate. That means that you knew exactly where 92% of your orders and sales originated. You knew which specific mailing, and which specific list caused the order. You could fine tune the mail dates to improve response. You could fine tune the select on a rented list to improve response. When you did those things, you could actually see the impact in your results on the next mailing – but of course, there was a four to six month lag between making those changes, and when you saw the impact.

Everything was measureable. Everything was efficient. Moreover, there was accuracy – there was no guessing, no matchback, and no attribution. You simply knew every facet that was driving your catalog’s success. We long for those days of accuracy. We are averse to moving our businesses into areas where we are taking an unknown risk, and one which we can’t measure with a special metric.

More important, our catalogs revolved around that one number – 3.3, and unfortunately, that number is still with us, and is now growing to 4.0.

Twenty five years ago, 3.3 ounces ruled our lives. We engineered catalogs to maximize the number of pages that we could squeeze in under that threshold. Depending upon your trim size, and paper weight, most catalogers could mail between 56 to 64 pages and manage to be less than 3.3 ounces. We dropped paper weights to add more pages. We worried about the humidity at the printer (really, we did!) the day the book was printed because it might be enough to cause a postal inspector to charge a pound rate penalty.

We pitied mailers that only had enough merchandise to justify 32 pages. We could not envision a reason why anyone would purposely mail a catalog that did not maximize the number of pages you could squeeze in less than 3.3 ounces, because “the postage is free”.   Response rates were so good, and paper relatively cheap, that we never looked at the incremental paper costs. We just saw free postage.

Now, that mentality is going to take on a whole new dimension, as merchants and creative directors are going to think they can add more pages for free. They will now think in terms of maximizing that 4.0 ounce limit, even though we know we could and should trim pages, and plow some of the paper savings into expanded circulation or even just do more on the web. We won’t do that because we hear FREE postage, and we come running. (Try and find one printer that doesn’t think this is a great idea!)

But what about the other expenses? What about the creative expense (and time) in generating 12 more pages? What about the extra paper expense?  Your cost per catalog is still going to increase, and you will try to cover that extra cost with more marginal product, or worse, “branding” pages which are not selling at all. If you already had 12 page additional pages of truly outstanding products, would you have let the “old” pricing format of piece and pound rate for anything over 3.3 ounces have stopped you from mailing them before?  Probably not. You’re being enticed into adding extra pages of products that are marginal at best, simply because of “free” postage. What does the USPS have to lose? They are coming to your mail box each day anyway. So what if the tray is a little heavier if it encourages catalogers to keep mailing?

My biggest fear is the marketing director or member of upper management that is going to demand that the catalog now print on heavier stock. “No more of that 38lb stuff. Let’s go to 60 lb., with a varnished cover. And a gatefold! The sky’s the limit because the postage is free, and you know, postage is the most expense part mailing a catalog.”

We know we should make our catalogs more of a “web driver” but we won’t. That type of catalog is not appropriate for our customers. Your customers may respond to web drivers in your catalog, but not my customers – they still shop my catalog, page by page.

We love the idea of getting those extra 7/10ths of an ounce of free postage because it can be measured. There is no risk here – we can see that our cost per catalog is going from 52¢ to 55¢ each, because even though the postage is FREE, we have those pesky other costs. But no matter, because we know the old rule of thumb that we heard at a DMA Catalog Conference in 2003 that “if we add 20% more pages, sales will go up 40%. Or maybe it was that they will go up 10%? Oh, it’s been so long since I heard that rule, which way does it go? Sales go up by double the percent of space, or half the amount of space? Who cares, the postage is free.”

This leads to another flaw in our thinking, tied to page counts and postage expenses, which is a mentality that our products have to be in the catalog in order to sell. Consequently, we build merchandise assortments around a mythical number of products that could conveniently fit into a 64 page catalog. We don’t think in terms of having more products on our website, and using the catalog as a vehicle to drive people there to do their shopping. We don’t do this because we never think of our websites as better than our catalogs. Our catalogs are what people want to shop.

As a result, our efforts to sell more products on the website – that are not in the catalog –fail, because we don’t support them adequately online.

4.0 ounces will soon become the most dangerous number in the catalog industry. It causes us to think small, and to be restrictive with our product assortment and consequently, with our ability to acquire new customers. You need to think beyond the benefits of free postage associated with 4.0. Just like the other postage gimmicks that the USPS is offering such as a 2% discount for using QR codes, or a discount for using scented paper, this is not “found” money.  There is a real cost (hard cash) and an opportunity cost associated with making changes to your catalog to pursue a postage savings that comes with other expenses, which you would not otherwise have ordinarily pursued.

If you want help determining how your catalog can survive on a smaller page count, and to use the savings to expand circulation and acquire new customers, contact me.  Don’t automatically submit to the siren songs of the printer mermaids. You have a lot riding on how this plays out.   You still have time to adjust your catalog growth strategies and catalog circulation planning for 2017.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

 

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The Content and The Experience

This week is the most nerve-wracking of the year for me. Two hundred catalogers and ecommerce companies are about to descend on Concord, NH for Datamann’s annual catalog seminar, which we are hosting for the VT/NH Marketing Group. I feel personally responsible for how this event goes. I have clients to attend to. I have to watch for people that I have asked to say hello. I have to make sure the two guest speakers have everything they need. Although the board and staff of the VT/NH Marketing Group are there to help, I feel I have the fate of everyone’s enjoyment of this event on my shoulders.

And on top of all that, I have to give my presentation, too!

Many of those coming are Datamann clients, but most are not. Catalogers are coming from 25 different states – 19 catalogers from Wisconsin alone! With all due respect to the folks from Duncraft and Company C (two Datamann clients who are headquartered in Concord, NH), all these mailers are not coming to Concord for the natural beauty – not at the end of March.

Most of the attendees are also readers of this blog, and I’m always afraid they are expecting a real “pearl of wisdom” from me in this particular posting, as it sets the stage for what is to come later this week. Oh, the pressure!

Let’s look at what I’m trying to do. The VT/NH Marketing Group is not a national organization. The two states of Vermont and New Hampshire represent less than 1% of the US population.  Datamann is the sole sponsor for this event, and we only have three speakers. We are in Concord, NH (population 42,000), which is not a particularly easy city to get to and aside from being the state capital, is best known as the final resting place of Franklin Pierce (recently ranked 41st in importance out of 43 US presidents).

So, how did we manage to get 200+ attendees at our seminar, more than 75% of them being catalog mailers or ecommerce companies?

The reason is simple – as Kevin Hillstrom said to me, it’s the content and the experience.

Catalogers and ecommerce companies are starved for hard advice. They don’t want three days of platitudes from speakers that are also sponsors, and also vendors.

Yet – that is exactly what I am – speaker, sponsor and vendor.  But I’ve spent the last six months telling you exactly what this seminar was going to be. In all that time, I’ve never promoted Datamann. Most of you are not even sure what Datamann does. I won’t be promoting Datamann at the seminar either. There will be no “seminar discount on a new SQL database”. I have been completely transparent, as has Keven Hillstrom in his blog, describing what we will be presenting and what you will get. We are asking you to work hard and think, damn it!

Success comes in cycles. Mistakes are at the other end of those cycles. In the past few weeks, I have had several very large, well-established catalog companies contact me asking why their sales and response have been trending down and taken a steep drop since the start of 2017.  In each case, the causes have been self-inflicted. One mailer, with a $100 average order, featured a $2,000 product on the cover and opening the spread, as well as cut product density by 10%. What did they expect was going to happen?

Another mailer commented on my recent blog posts about out-of-control creative costs, and stated that their creative director refuses to accept anything less than “perfect photography”, and since there is often not enough in the budget to do new photography to the extent that this director feels meets his high criteria, they constantly reuse old photography. Then they wonder why their sales slide down.

These are tactical mistakes, but they are not limited to “small and new” mailers. They are equally committed by large and mature catalogs.

The bigger issues are the strategic mistakes catalogs make, or the strategic opportunities they allow to slip away. Simple tactics like “hyper-geotargeting” and “personalization in emails” are not going to save a sinking ship. That’s why our content – Kevin’s, Frank’s and my presentation – focuses on the hard choices that you make that have long term implications to the survival of your business. That’s the content.

The experience is perhaps less obvious. One of our attendees this week is coming from California. He emailed me last week telling me that he had attended the eTail West conference earlier this month and that it was a “vendor cesspool”.   I can’t speak to the veracity of that statement, but we’ve all been to seminars and conferences where it seems like the vendors are everywhere. Every speaker tells you that they, and they alone, can “transform the enterprise with a new disruptive technology”.  Yet, not one of them understands the core skills required to mail a catalog.

I purposely put the attention on the attendees at our seminar, not a long list of sponsors. As the sole sponsor, I have no conflicting objectives with which to contend.

I give each speaker as much time as they want to give you more than just a quick overview. As Frank Oliver said, “An hour is never really enough, is it?” We have scheduled plenty of time throughout the day for you to meet, mingle and network with your catalog peers.

If you are coming to Concord this week, enjoy the content and the experience. Please say hello, and let me know what we can do to make next year’s seminar even better.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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