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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Do You Want to Be Pure or Rich?

This is part 2 of my revisit to what is to become of the single title catalog.

Around 2004, when I was working at Millard Group, we hosted a client symposium. Catalogers at that point had gone from having a simple website on which – if you were lucky – you could place an order without the site freezing up, to acknowledging that the internet was something that customers wanted.

One of our presenters was Steve August (at that time, the marketing guy for the Brookstone catalogs), who explained how Datamann (a shameless plug!) was doing fractional allocation matchback for Brookstone, showing how orders on the web could be matched to a catalog mailed. There was a stunned look on many of the attendees’ faces. I could tell that many of them were thinking, “I can’t just look at a source code report anymore? I have to do all this extra work?”

Finally, the CEO of a New England based catalog company said, “I hate the internet. I wish it would go away. I can’t understand why anyone would want to order off the internet when they can call one of our telephone reps, who can help them pick the right product.” Two-thirds of the room nodded their heads in agreement with his statement, and the other third rolled their eyes and quietly thought “jerk”.

I cite this story because catalogs have moved a little further along the ecommerce spectrum, but many still harbor the belief that they wish the internet and mobile would go away, or at least, were not so powerful. They love their catalog. They know they are doing an adequate job of reaching their baby boomer customer, but they long to get that baby boomer’s 30-year-old children to purchase from them and, ideally, to place that order from a catalog, which these catalogers view as their key to catalog growth and catalog survival.

For most catalog companies, you have done everything you were supposed to with regards to your website. You have added all the mandatory bells and whistles. You have an online staff that runs your PPC, SEO, email and abandoned cart programs. You finally developed a mobile site.

But deep down inside, management still feels that the heart and soul of the company is the catalog. After all, out in the company lobby, there’s a stack of the most recent catalogs – there is not a screen on the wall showing the website’s home page.

Ok – you get the point. You are still catalog-centric. Even companies that think they have turned the corner, and think they are web-centric, admit to me that 100% of their products are in the catalog, and they have no “web-only” products.

When I Feel the Heat, I See the Light

However, this series of postings is about what has changed among catalogers in the past 2 ½ years since I first wrote about the plight of single title catalogs. I have witnessed among many catalogers a change in focus and a realization that the internet is where the future of the company lies. And I’m not just talking about having a good website to compliment that catalog, but a fuller ecommerce orientation that includes using PPC, SEO, Facebook, and Instagram, etc.

To quantify this change, think about this: At our catalog seminar in March, I gave attendees a list of 16 topics to pick from to choose what they would like covered for the seminar in 2018. I asked them to mark two choices. Out of 200 attendees, we had 84 responses (42%, not bad!). The number one requested topic for 2018 – “How do I change from being a catalog company to an ecommerce company?”.   The least popular topic – “Working with the catalog co-ops”.

But here’s the rub – just as you have maxed out the potential circulation from the co-ops, you have now maxed out the affordable ecommerce options like PPC. Yes, you can still keep mailing catalogs, and there are still some things you can do with social media, with better targeted emails, and retargeting, but none of these are going to move the growth needle in a big way.

Look around and you see that even the main stream media is carrying stories about the collapse of retailing. Thousands of stores are closing this year nationwide. Whole malls are being deserted. But who is growing? Amazon.

Now let’s go back to my title question – do you want to be pure, or rich?

Today’s bogeyman for catalogers is not the internet in general. Today it is Amazon and the other marketplaces like eBay and WalMart.com. Some of you are deathly afraid of Amazon. You think it is evil. “Why would I want to sell on Amazon?”

You either experienced or heard of examples of catalog companies which began selling a product years ago on Amazon, and which did well at first because you were the only one selling it there. Then suddenly, there were ten other sellers – including Amazon. And for the past 10 years you’ve been telling anyone who would listen, about how you got shafted by Amazon when they started selling the same cat-shaped tissue holder that you started selling on their site. Amazon saw how well it was doing for you, and they stole the idea from you. So, ever since then, Amazon has been the enemy.

I’m Amazon agnostic. My biggest concern about Amazon has been that while they grew at 25%+ each year, all those transactions were not going into the co-ops, depriving the co-op databases of a huge chunk of transactions. For some reason, this thought never occurred to many of you because the co-ops simply kept telling you “all is well”.

Many of you dislike Amazon with a passion because you see them as the reason your business is declining. The few buyers you have generated from selling on Amazon just DO NOT RESPOND when you try to market to them. These customers don’t recognize that you and your catalog were the ones that shipped that lighted pumpkin figurine – they think it was Amazon. You want to scream “This is what’s killing catalogs and retail!”

But, how many of you are Amazon PRIME customers? I’m betting that almost all the readers of this blog are, for all the same reasons that millions of other consumers are – it is convenient, and their product assortment is ubiquitous.

Should you be on Amazon? That’s a question each of you needs to answer on your own. I recently read that half the US population either never or rarely uses Amazon – so if you are serving those mostly lower-end shoppers with your catalog, Amazon may not be that productive for you, and Amazon may actually not be a problem for you.

But let’s look at your growth problem from this perspective – you have stalled in your efforts to acquire new customers from your existing sources. You have been unable to develop a marketing strategy that brings in tons of new customers at little or no cost. You are not “creative” in the new online world of marketing, and with new ways of selling. But you do have products, and if you are strong at anything, hopefully it is at being a good merchant.

Amazon is not going to stop growing anytime soon. And after last Friday’s purchase of Whole Foods, you can see that Amazon has its eyes set on many parts retailing. Either be part of it, and follow all the tactics for using Amazon effectively, or stop complaining. Do you want to be pure, or rich? Maybe the more appropriate question is do you want to have a shot at remaining in business or keep crying that you are going to resist Amazon?

I’m not an expert on selling on Amazon – but there are plenty of people who claim to be. I’m sure that one or two actually are experts, and they can help you with the whole strategy of selling on Amazon (as well as sites like eBay and Walmart.com), with regards to pricing, margins, speed, placement, etc.

If you have been a good catalog merchant, and developed proprietary products which would be tough for anyone to copy, then why not sell on Amazon? What’s wrong with generating cash? Your job is to sell product, not mail a catalog.

Let’s be clear, I’m not advocating that selling on Amazon is a cure-all for what ails the catalog industry. It is simply one arrow in the quiver, albeit a very big arrow. As with any company selling products via any channel – whether it be a retail store, a catalog, a website or all three – if you haven’t got unique product, which is priced right, and is in demand, you are in trouble. But if you do have that unique product, especially if it is proprietary to you, don’t be afraid of selling in the marketplaces like Amazon, eBay, and Walmart.

“He is no fool who gives up what he cannot keep to gain what he cannot lose.” – Jim Eliot

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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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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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Time For Questions

With just three weeks to go before our catalog seminar in Concord, NH on catalog metrics, I’m happy to announce that we have over 200 registrations, and the conference hotel is sold-out (but there are other hotels nearby).  I keep getting notes and emails from attendees expressing how much they are looking forward to Kevin Hillstrom’s business simulation.

But before Kevin presents his simulation, I’ll be presenting my annual update on the present status of the catalog industry and my take on catalog metrics. Each year, I start out by asking for a show of hands to reveal how many of the companies in attendance grew the prior year by more than 10%, then 5%, then 1%.

Last year there were only a few that had grown by more than 5%. There is growth out there, among certain retailers. People are still buying stuff. So why is there such little growth among most catalogs?

Let’s forget about the co-ops for a minute and whether they are good or bad, dying or growing. Let’s just focus on one thing – there is not much prospecting for new customers going on at most catalog companies.   Why?

Before I answer that, let me share with you a brief story.  In the early 1990s while working as the catalog marketing and circulation guy at Brookstone, the company hired a new CEO who had no catalog experience.   The company was in rough shape, but the drain on our financial success was not the catalog, it was the 200+ stores. The new CEO turned his attention on the stores because that was the biggest part (80%) of the company, and because the catalog was making plan.

Then one day, my boss, the VP of Marketing hurt his back and was out for two weeks. During those two weeks, every time someone had a question about the “financials” on the catalog, they came to me. One day the CEO called me into his office to ask why list rental income was down.

This was the income we derived from renting our list to other mailers. In the company I had worked at before Brookstone, we did not actively promote the rental of our file. We exchanged a great deal, but had limited rentals. Upper management at that company had “strategic reasons” for this. So, when I got to Brookstone, I continued this “laissez faire” approach to list rental income.

At Brookstone, it was very unusual for the CEO to be quizzing a manager on a specific line item. However, because this CEO had no mail order experience, I thought he would appreciate an explanation from me on my “strategy” towards list rental income, and the fact that I had no control over list rental income, as it depended on other companies using our list, which was dependent on their circulation plans.

Big mistake. HUGE mistake.

For a guy that knew nothing about catalogs and mail order, he started to ask some pretty probing questions. That’s why he was CEO. He knew that Millard Group, located right across the street from Brookstone in Peterborough, NH, was our list manager. “Put some pressure on those guys over at Millard to proactively sell our list. Do some promotions. Get the word out in the industry that you are ready to deal. Change the price. Do whatever you have to do, but get that income up. YOU control and YOU are responsible for this line item – don’t blame it on other mailers.”

To that CEO’s credit – whose name was Hank Kaminstein – he never raised his voice at me, never uttered a swear word, never spoke to me in a sarcastic or demeaning way. Instead, he taught me the value of taking action.

That is what we are going to focus on in three weeks at the seminar – taking action. You wanted to learn about which catalog and ecommerce metrics you need to know and use to grow your business. You wanted to know how merchandise analysis could help you grow. But in reality, you need to see that metrics really don’t help you if you are unwilling to change, and unwilling to take action.

To answer my original question – there is so little prospecting for new customers because you won’t take action and you don’t want to change the way you acquire customers. Carpet bombing with prospect catalogs with names sourced from the co-ops is not working to the degree it used to, but you are reluctant to try other options. Hopefully by the time you leave our seminar, you will have the ammunition you need to impart that sense of urgency for change at your company.

There are four parts to our seminar – my presentation, Kevin’s business simulation, Frank Oliver’s presentation on merchandise analysis (which he has been hinting will include something on “merchandise warfare”), and our closing Q&A session, which in years past could have lasted twice and long, and we still would not have gotten to all the questions.

So, if you are registered to attend, start thinking about your questions for Kevin, Frank and me. If you send them to me before the seminar, they will get priority at that session. I’ve already had a few submitted, which I will share:

One for Frank – My boss keeps telling me that our merchandise needs to be a “curated collection”.  What did catalog merchants do before they became the equivalent of a museum curator?

One for Kevin – A while back, you asked in your blog if it was better to have 100 potential customers that were “engaged” with the brand, but who had not ordered, or one customer that had placed an order. What is the answer for my company?

If you have not already registered for the seminar, click here to visit the VT/NH Marketing Group’s website.

Registration costs for this all day event:

  • $135 for VT/NH Marketing Group members
  • $200 for non-members
  • Registrations are accepted until March 28, 2017

If you are not already signed up for emails from this blog, click here.

by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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I Get It, They Don’t

Who in your company “gets it” and who doesn’t? More important, who in your company is never going to “get it” with regards to how their work must evolve to keep pace with the changes our industry is facing?

Years ago, I sat through a day-long meeting for a client that wanted to make a major creative overhaul to their catalog. It was a hard goods catalog (home furnishings and products for around the home), that had a fairly basic design.

The meeting was tedious for me. The “creative” staff, who were overly polite to one another and democratic, listened to everyone’s idea, and did not offer judgment (traits I have been slow to master). They discussed every little nuance of the existing catalog design.

The head of the Creative Department was doing a good job getting everyone to understand that they had become too comfortable in their work, and that change was needed. They came up with a long list of changes they were going to make, some of which the customer would never notice, some of which were a major departure from the way the book presently looked. All of these creative changes were intended to drive response.

Then it happened.

At the very end of the meeting, the Art Director, the person who would actually be making the changes in the catalog, said “Well, what about the gutter line? Is that staying?”

This catalog had an ultra-thin line that ran up either side of the gutter (the center of the spread where the two pages meet), about a 1/8th inch from the edge of the gutter. It was a design element that someone had inserted years before, for no apparent reason. It was not important.

But the fact that the Art Director still thought she needed to ask permission to do away with this trivial design element showed how little she understood of what had happened that day. It showed either how untalented she was, or how insecure she was in actually making changes.

I bring this up because last week a subscriber to this blog told me that he would not be coming to our seminar in March because he “gets it”. But, he was encouraging his boss and several other members of upper management to attend because “they need your medicine”. “I get it, they don’t”.

The medicine that I have been dispensing in this blog, and that my co-presenters – Kevin Hillstrom and Frank Oliver – will be dispensing on March 30 at Datamann’s seminar is that the catalog industry has fundamentally changed, and you have to change too.

I had another email recently from a company CEO commenting that one of his key staff people – a person that could significantly help bring some much needed change to their company – was not working out as well as they had originally hoped, and that he was a “work in progress”.

Numerous times I’ve had members of upper management at companies tell me that they plan to do some new initiative – launch a new catalog, introduce a new product category – and they tell me that their existing staff is just not up to it. “They can’t think creatively” or “they are not very strategic”. So, upper management brings in someone new, who knows nothing about the company, but who holds the promise of “thinking outside the box”.

In my 30 years of experience, I have found that the existing staff at most companies had the talent, had the initiative and had the strategic view, but those talents were hidden from upper management because management had slapped down those staff members in the past every time the staff had dared raised that hand to propose a change. We are, at times, our own worst enemies.

I will confess that earlier in my career, I was not good at “brainstorming” sessions, as I tended to be the one who would say “That’s a stupid idea”. I like to think I’ve gotten better in that area, although as a consultant, I walk a thin line between not wanting to insult a client vs. not wanting the client to go off on some wild scheme that you know will lead to disappointment and disaster.

But, if that type of “slap down” environment exists within your company – no matter how subtle and nuanced it might be – then your staff probably is NOT going to rise to the occasion and help you evolve. It isn’t that they don’t want to – they just aren’t sure that you really mean it. They suspect that deep down inside, YOU are the one that doesn’t want to change.

Going back to the Art Director with the question on the gutter line, I don’t fault her for asking that question. I knew the players in that meeting. I knew that the Creative Director that was trying so hard to appear magnanimous and open-minded in that meeting would just as quickly tell the Art Director, when everyone else was gone, to design the book the way he instructed.

Here’s an exercise for you: how many established catalog companies, ones that have been around for more than 25 years, can you think of that have re-invented themselves, and turned their business around? It’s probably a pretty short list. It’s tough for any company – regardless of industry – to reinvent themselves.

There really is something to be said for new companies simply because they have less baggage, and new ideas flow more freely. That is just the way of it. That’s why we are not still driving Packards, Ramblers and Pontiacs. Some companies just don’t evolve.

But we can’t all work for new companies, can we? We have to make the changes needed where we are. We need to go beyond discussions about “gutter lines” and focus on the catalog growth strategies that really matter, and that will move the needle. Those are the things we will be discussing on March 30th.

So, if you “get it”, but your boss or your staff don’t, send them to our seminar on March 30.

2017-seminar-brochure-cover

Our seminar last year sold out a full month before the event, so please plan on registering early. Seating will again be limited.

To register for the seminar, click here to visit the VT/NH Marketing Group’s website.

Registration costs for this all day event:

  • $135 for VT/NH Marketing Group members
  • $200 for non-members
  • Registrations are accepted until March 28, 2017

The Marriott Courtyard/Grappone Conference Center, Concord, NH is located at 70 Constitution Ave in Concord, NH – just north of the intersection of I-89 and I-93. Special room rates of $119 are available for attendees of the seminar for the night of March 29, if you book your room with the Marriott by March 1, 2017. You must mention your attendance at the seminar to receive the special rates, or reserve your room directly at this special link: http://cwp.marriott.com/mhtcn/vtnhmarketinggroup/

If you are not already signed up for emails from this blog, click here.

by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

 

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