Getting to The Core Of Catalog Marketing Advice

I received an email recently from the CEO of a company that, like Datamann, is a supplier to the catalog industry.  He was commenting on one of my recent blog postings, and offered an observation about a problem that he saw within the industry.

He mentioned that many online media outlets are reporting on companies that use Artificial Intelligence (A.I.) in their quest to find new customers and correctly target existing ones. He stated that in most of these articles the term A.I. is misused. The companies profiled are instead using “just predictive models (typically neural networks) and not true generalized ‘artificial intelligence’ at all. But claiming the use of AI is all the rage among Marketing Tech vendors (and the online media reporting on their activities) and causing massive confusion among the marketers I speak with.”

I knew exactly what he was meant. At a company I was previously associated with, every new service or product that was introduced – no matter how mundane – was promoted as having “advanced analytics”.   So we’ve progressed from advanced analytics to artificial intelligence, and both turn out to be an exaggeration.

This vendor went on to describe many of the innovative services and products that his company provides their clients.   Some of them sounded pretty cool – even cutting edge. But he wasn’t trying to impress me or sell me anything. Instead he wanted to make a point that so many of us have to contend with. Some of his products are really meant to make a mailer’s job more efficient and easier. But what is the client’s typical response? “Cool – but now what should I do? Can’t the system just act on these insights for me?”

He bemoaned the death of fundamental marketing skills among most catalog mailers, stating that “the Staples ‘Easy Button’ for marketing has become fully realized and it’s doing far more harm than good at many companies today.”

We all see it. When I polled mailers and marketers for what they wanted to learn at our seminar next week (yes, it is now less than two weeks away), the marketers I contacted almost universally asked for “the five most important metrics I need to run my business.”  When I explain to mailers that those metrics are different for everyone, they lose patience. They don’t want to hear that – they want me to skip to the “best” metrics and reports that everyone else uses.

I can’t blame mailers for not having the patience to understand that their business – as is everyone else’s – is unique. I’ve mentioned before (perhaps ad nauseam) that there has been a talent drain in the catalog industry. Maybe a more accurate statement is to say there just aren’t many staff left at many catalogs. It’s not that the individuals left lack talent – it is simply a fact that in just about every catalog company, the jobs of five people eight years ago are now being done by one or two people. The reasons that this has happened are endless.

It Is Always A Step Backwards

When staff is downsized, it is almost always a step backwards. What happens when someone is downsized or leaves and you are left to do your job and the other guy’s job? You cheat, and take short cuts to get your job done. Maybe cheating is not the right word, because it implies that what you did was ethically improper. That’s not the case. But you need to find a way to get more done, so you look for the easiest route. One of those routes is to outsource your marketing and circulation planning.

There are plenty of consultants in the industry that will do circulation planning and/or modeling for clients. The vast majority of these folks are ex-mailers. They know their stuff, and generally they are all good at what they do.  I perform the circulation planning for a handful of Datamann clients. My methods are no better or worse than those of other consultants. We each have our little quirks that make how we do it different from the other guy – but no one has a secret sauce, beyond experience.

But here is what bothers me. I view circulation planning as being a core function of the catalog. That’s because that was the role I filled as a cataloger. Of course I want to think of my job being “core” to the success of the company. I have always felt it was a mistake for catalog companies to “farm out” their circulation planning. To me it is a relatively easy exercise. But when you have someone else do it, you become that much further removed from the business. Once you start letting someone else plan the circulation, after a few seasons you start to skip looking at the reports that consultants like me provide that show how the last mailing performed, and how the next one is planned. You start to lose touch with how your customer is performing.

This phenomenon of losing contact with your customer is even more pronounced when you have someone doing your circulation planning via modeling. At least with RFM, if you wanted to, you could see how each customer segment is performing. But modeling requires a huge leap of faith. You are often mailing huge swaths of your customer file in very large segments, simply defined as Segment 1, Segment 2, etc. Yes, you can see a difference in response between the segments, but can you tell which portions of your customers are not responding?  Do you even take the time to ask the modelers, or do you simply assume that they are doing the best job that can be done?

It’s one thing to hire a consultant like Kevin Hillstrom or Frank Oliver to come in and provide you with an assessment of what you are doing. Maybe even have them build you a model. But, consultants like Kevin, Frank and me are always willing to teach you, the mailer, how to do what we just did for you, so you can replicate it and carry on the process when we are finished with our assignment. Rarely do mailers want to do that. They want that “Easy Button”.

I’m not knocking companies that do hire outside modelers. There are many of you that are big enough to justify modeling, but not big enough to hire your own in-house statistician to do it.  The problem is that it is not that much of stretch to go from the “easy button” of modeling to being confused by discussions of artificial intelligence to think that your model should be able to “learn by itself” what to do next.

I don’t see this as an issue with every mailer. People that have been “around for a while” know what is, and what is not, possible. It’s the younger professional, mostly from the ecommerce side of the business that suddenly find themselves also responsible for the catalog that think there should be an algorithm for everything. “Facebook can determine what kinds of people are most desirable to view my ad, why can’t your model just figure out the 2% of the people that are going to respond, and mail to them”.   They of course understand that Facebook’s response is not going to be 100%, but can’t understand why the postal model should not be attaining 100% response.

In my opinion, there is no “easy button” to catalog marketing. You have to be involved. You can hire others for their expertise, but don’t become too reliant on them. If you put too much of your business on “autopilot”, you will lose touch you’re your customer, and what they are doing. Your company will become an example of the old joke about the guy that jumped from a 10 story building, and people kept hearing him say as he passed each floor “Okay so far”.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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There Are Still Some New Tricks

A few weeks ago, I wrote about the death of the catalog media, like Multichannel Merchant magazine. In preparation for doing so, I went out to the loft in my garage where I keep old catalogs and old copies of Catalog Age (predecessor to Multichannel Merchant) to get one to use a photo of in the posting.

I looked through a few old issues of Catalog Age from the late 1980s and early 1990s. There were articles that went into great detail explaining the benefits of NCOA, using an 800 number, talk time in the call center, mailing to Canada (that topic never seems to go away), and the best way to allocate multis on a remail. It was a nostalgic trip back to the topics that were so important when I first started in cataloging 30 years ago.

Now where are we? All of these marketing wonders of years past are now taken for granted, or are misunderstood. We no longer debate the pitfalls of desktop publishing, whether to include a FAX number on the order form (most of you don’t even have an order form), and your list broker, who you counted on to negotiate your list deals, has retired. We can’t even count on the likes of Hershell Gordon Lewis and Don Libey to warn us of our excesses and mistakes.

There are still many neat tricks that you can do with a catalog to drive response. But, just like I’m sure a lot of great blacksmithing secrets went to the grave when cars replaced horse and buggies, so too are the many secrets of cataloging going to disappear.

So let me give you a new one for your circulation planning.

Most of you segment your file by RFM, which is fine and adequate for many of you. You further segment by channel – typically by whether a buyer purchased by mail or phone (typically labeled “catalog buyers”), or whether they ordered via your website (typically labeled “internet buyers”). You may also break out your retail store buyers and Amazon-only buyers (which I recommend).

But, it’s the web/internet buyers that can be further segmented to improve your response rate when mailing a catalog. During matchback, those “web buyers” that matched a mailed catalog can be identified as “catalog from web buyers”. These buyers are not true web buyers – they still used/needed the catalog to respond. They will perform better in future mailings than the pure web buyers (customers acquired through SEO, PPC, email, etc.) with whom they were previously grouped.

When Datamann identifies these customers for clients, we keep these “catalog from web” buyers separate from those catalog buyers that ordered over the phone, partly because they perform at a slightly lower response than mail/phone buyers, but also because in the future, they may be the customer to whom you can mail a smaller catalog aimed at driving these buyers to the web.

In general terms, these would be the difference in magnitude in response you would experience between these groups of buyers, when comparing equal RFM segments:
Mail/phone buyers = 3%
Catalog from web buyers = 2.75% to 2.50%
Remaining (pure) web buyers = 1.75% to 1.25%

If you model your names for mailing, your models probably already take this performance by source into consideration. If you use traditional RFM for your mailings, this adds an additional set of segmentation for buyers, and requires an additional step (identification of the names through matchback), but the added value in the difference in response is worth the effort.

Finally, by identifying those web names that in theory, needed no catalog to respond, you have identified those names to which you potentially do not need to mail a catalog, and have potentially reduced your overall circulation expense.

There are still some good tricks to employ to drive response with your catalog. This one is simple to identify, easy to implement, and very profitable. Go to it.

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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 Private and Lonely Database

The allure of a private prospecting database has attracted many large catalog companies over the year. Years ago, Williams-Sonoma created one for use on their multiple titles. Just as I was exiting the list industry, American Girl talked of creating one, and I don’t know if they ever pulled it off.

I bring this up because the only response to my posting in early November on the need for the catalog industry to act in a more collaborative manner (We Are No Longer Competitors) was an email from a list manager, sharing the news that Bluestem Brands was creating a private prospecting database for their catalog titles.

In 2015, Bluestem acquired a dozen of the Orchard Brands titles, including Appleseed’s, Haband, Norm Thompson, and Wintersilks. A few weeks ago, Bluestem sent a letter to list owners and list managers detailing their plans to create a proprietary prospecting database, seeking participation in that database by these list owners.

Here is the most important part of the letter “The primary objective of this initiative is to consolidate, enhance and model the prospect lists used by the individual brands listed above with the goal of driving increased prospect list usage and new customer acquisition across all brands, with an explicit focus on expanding the usage of non-cooperative database list sources. Over the past several years the cooperative databases have become a larger share of the new customer acquisition mix, however the productivity of co-ops has eroded over that timeframe resulting in increased new customer acquisition costs. We anticipate that by enhancing our prospect universe data and through the application of modeling technologies, we will be able to increase the usage of list universes from non-cooperative database sources.”

I don’t begrudge the Bluestem folks behind this initiative at all. It makes perfect sense for them to do, as they need to protect their investment, and grow their titles. If they can pull it off, more power to them.

Let’s be clear though on one point – this is a database for their 12 titles. It is not going to be a shared industry resource. Again, I have no problem with this, although it does run counter to my comments about the industry needing to be more collaborative (more on this in a minute).

But take note of why they are doing this: “the productivity of co-ops has eroded over that timeframe resulting in increased new customer acquisition costs.” Wow! The customer base and demographics represented by 12 Orchard Brands’ titles are what the co-ops know best – older Baby Boomers, middle-class female apparel buyers. These 12 titles are custom made for the co-ops’ target household. And yet productivity is eroding. In case you needed to hear it from someone else, and proof from a company that has a lot of skin in the game with 12 large titles, the co-ops are dying.

I have no doubt that Bluestem will successfully create some form of proprietary database. Based on the roadblocks I recall Williams–Sonoma faced, Bluestem’s efforts may not proceed as smoothly or as quickly as they had initially planned. But they have time and size on their side.

But what happens to the rest of you?  Let’s assume that Bluestem is able to create this proprietary database. Let’s assume they pull all of their customer records out of the co-ops, or at least significantly reduce the number of buyer records they are contributing to the co-ops. What happens to the rest of you trying to reach that same audience? As if Amazon wasn’t sucking enough transactions out of the co-ops, you just had another significant reduction in the potential prospect audience to which you can target.

As more multi-title catalog companies experience the same rise in new customer acquisition costs, there will be additional efforts to create other private prospecting databases, which will only put more stress on the existing co-ops, and more stress on the solo-titled catalogs still trying to survive on their own. Any of the new companies trying to start new co-ops will simply wither on the vine. Oh, what a vicious circle.

But, I see this as a start. The need to be more collaborative among catalogs will only grow. Yet, let’s be realistic.  I never would have expected any company to raise their hand and proclaim “Yes, we will lead the way. We will weather all the hardships and criticism to help the entire industry, not just our title(s), to grow in a collaborative way.”  No, history shows that companies would do exactly what Bluestem (and others before it) is doing, which is to go it alone – at first.

However, eventually, if more companies do what Bluestem is doing, something will have to give, because all of these individual prospecting pools will be missing the vibrancy that comes from having the entire industry involved. They cannot exist for long as isolated pods of names.

What’s the lesson here? First, you are going to be left behind if you are not aggressively developing new methods of customer acquisition. Second, don’t wait for the co-ops to implode because I fear that implosion is coming faster than many of you expected.

Finally, don’t email me complaining that I gave you vague advice to “find new methods of customer acquisition”, without providing you with a detailed list here of inexpensive, sure-to-win methods of catalog customer acquisition specifically aimed at your catalog. You are a marketer. If you are really talented, use the gifts that the marketing gods gave you to figure this out on your own for your company. This is what you get paid to do. You do not get paid to be friends with the co-ops or the other vendors that you are cozy with now, and ride their ship under the waves with them. Get moving. Try new things. Be aggressive. Push back on those that are so tied to sales forecasts that they won’t take a risk.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Cute – But Not $50 Cute

I have my wife to thank for giving me the idea behind the topic of today’s posting. We’ll get to that in a minute, and you’ll have to watch the video at the end of this posting to understand today’s title.

In the last 10 days I’ve had three mailers (two of them not Datamann clients) contact me with the same question – “Our co-op performance is down this Fall season. Are we the only ones seeing this, or is it industry wide?”

Before I answer that question, let me relate an incident that happened this past week. One of Datamann’s UK clients came to New York for meetings with many of their vendors, and the consultant with whom we work with for this client. They met with all their co-ops; during those meetings, their printer, who graciously hosted these meetings in their New Your office, sat in and listened to what the co-ops were saying.

After those meetings, the client met with me, and when I was all done, that printer asked a very poignant question, which I will come back to in a minute (along with my wife’s inspiration).  Yes, I know – I’m stringing you along, but there is a reason.

I started out my discussion with the client by asking if the co-ops acknowledged that the universe of catalog shoppers in the co-ops was shrinking.  Did they acknowledge that Amazon was sucking transactions out of the pool which the co-ops used for modeling names? Did they say that as the number of viable names to which you can profitably mail a catalog decreased, they were going to make a corresponding decrease in the number of names in each model decile they provided the client?   The answer was “no” to all of these questions, although one co-op did acknowledge that Amazon was having an impact, but they had yet to determine how to respond.

I then asked, did the co-ops state that they were growing, adding more mailers, and more importantly, more viable names? The answer was “yes”.

I understand that the co-op sales reps must be under a huge amount of pressure to sell. (“Always Be Closing”). I also understand that even if the co-op sales reps truly know what is happening with the universe counts of buyers within their respective databases, they can’t reveal that bad news to clients. We’d all like to think they could and would tell us, but that would be touching the third rail of selling co-op names, which these sales reps cannot do.

I then got on my soapbox, and gave my view to the client of what I see happening in the industry this season. Co-op performance is down, and it is pretty much industry wide. Yes, a few mailers are probably up, but in general, response to co-op segments is down.

The reason is obvious – the universe of viable catalog buyers which the co-ops receive is shrinking. They will deny it. They will tell you that they are adding more and more names – and they are. They are adding retail shoppers, grocery store buyers, car buyers and as mentioned in my blog last week, lots of long since dead people.  The fact that someone bought some cat food and a gallon of milk last week is of no value to catalogers like you.

I say this is obvious, but some of you are choosing to ignore it, so let me explain it a different way. Stop and think about this for a minute. Amazon is now the largest seller of apparel online. These are not incremental sales – they are stealing sales from you. All of the hard good mailers have known this for at least the past 5 years, but now Amazon has caught up to the apparel sellers. None of those Amazon buyers or their transactions flow back into the co-ops. (I’m not even going to get into the fact that several of the co-ops – but not Wiland – are in turn selling your data to these online giants like Amazon, who in turn add nothing back to the co-op.) This cycle is killing your business and you are willingly feeding it.

No one – with the exception a few people like Kevin Hillstrom and me – will acknowledge this. (And both of us are getting tired of bringing it up, and many of you wish we’d stop).

As more transactions have moved online, and don’t flow back to the co-ops, has the size of your co-op model segments shrunk accordingly? NO! In order to maintain the volume of names the co-ops have been historically sending you, they “fill-in” with garbage names. Your performance goes down (but not your costs!) and the co-ops keep telling you that it is your catalog’s fault, because they are doing well, and that they are growing.

Datamann has done some things for our clients to improve the performance of the co-op names. We segment the names more prior to sending the files to the co-ops and generate more models based on our segmentation. We track the number of times the co-ops have supplied the same names to our clients, and suppress the names that are simply being mailed over and over that have no likelihood of responding.  The co-ops do not like either of these initiatives because it means our clients are taking fewer names from them. Although these programs help with response, they cannot stop the inevitable decline of the co-ops.

The Printer’s Question:

Which brings me back to the poignant question asked by the printer at last week’s meeting, which I’m going to paraphrase. He said “Bill, I sat through all the co-op presentations, and they certainly paint a different picture of the future of catalogs than you do. If the co-ops are as bad as you say, then what is the alternative?”

The alternative is testing/doing anything and everything, but mostly the alternative is creating some change. If you buy into my argument that the co-ops are dying, then you recognize that you have to change and try something else to acquire new customers. Or you will disappear.

This is the part to which we should all be rejoicing – it means that we get to do new things. Maybe the answer is TV: Vistaprint, Wayfair and Shoedazzle had back-to-back ads on our local TV station the other night, and they have been running these ads for more than a year. Maybe the answer is FSIs in the Sunday paper. Maybe it is doing an exchange of package inserts with a similar mailer. I don’t have the answer for every mailer – no one does. But that is why you hire people like the consultant that works with this client, a consultant who has the ideas and support from a team of companies like Datamann to effect that change.

Liz Kislik, a catalog industry consultant who deals with human resource issues, wrote me earlier this summer when I had commented in this blog about companies not changing quickly enough.  “Sometimes people want what they want more strongly than they want what will actually work, particularly if our recommendations as consultants will take longer, take too much persistence, or challenge something they hold dear.” Sage advice…

Cute – But Not $50 Cute

So, now the question – what did my wife do to inspire this posting this week? She “liked” the following video on Facebook, which I spotted, and immediately thought to myself “this video encapsulates what is happening in cataloging”.

Stop Wasting Time Making Photo Books (you have to watch this video to understand the significance of “Cute – But Not $50 Cute”.)

I immediately identified with this woman’s frustration with creating photo books. As the “family historian” I create an annual photo album of the prior year’s family activities. It is time consuming. It is frustrating as the website I use freezes up or loses my saved jobs.

But what makes this video so significant to catalogs is that it was not too long ago that the “photo book” websites like Shutterfly came about. Now, they are being replaced, or at least circumvented, by something that is even easier to use, and more relevant. Change comes fast.

This is the alternative. This is bringing change – in this case, working with Instagram to create instant photobooks. This solves a problem for the customer. When was the last time you introduced a change in your catalog, or a product, that solved a problem for your customers?

This is what will help you grow. Not joining another co-op, not doing another cover test, not debating whether you should offer 10% off or 15% off on Black Friday.

Changing, embracing change, making change stick at your company and finding alternatives to the catalog co-op databases.  These are some of the topics we covered at our Datamann catalog seminar last year – and ones which you will never hear presented at a conference sponsored by the catalog co-ops. We will be touching on these subjects again at our seminar in March 2017.

to-err-is-human

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Are They Really a Web Buyer?

When catalogs first accepted orders over the web, catalogers were mystified as to who these buyers were. I remember going to a conference where the owners of the Music Stand catalog said that whenever they mailed their catalog, web orders increased. People in the audience were literally shaking their heads in disbelief at this revelation.

This was followed by tests by catalogs putting their URL on the front cover, vs. not. Catalogers were afraid that if they encouraged people to order online, it would hurt response. Why? They rationalized that a good catalog shopper would pick up the phone and call in their order right now, but if you encouraged them to order on the web, they would wait until the next time they were sitting at their desk – probably at work – to place their order. This opportunity for procrastination would simply result in too many lost sales, or worse, the customer might have the audacity to search on someone else’s website for the same product.

Of course times have changed.

But there is one stronghold in “old school thinking” to which many of you are holding on to – classifying all buyers that order over the web as being a “web buyer”, and treating them all the same.

Many mailers – and this includes many Datamann clients – segment their database by customers who have mailed or phoned in their order (catalog buyers) from those that have used the internet (web buyers).

But I’ll use myself as an example of a catalog consumer.  I never use my smartphone to shop or browse the internet. I often go to Amazon and eBay when I think of something I want to buy. But even when I’m on my laptop, I rarely “browse” any catalog websites.  I still need a catalog to prompt my attention as a consumer. But, with the exception of the Edward R. Hamilton book catalog, I have not called in or mailed in an order in at least 10 years. I place all my orders with catalog companies online. I still see myself as a classic catalog shopper. But according to most mailers, I’m a web buyer.

Why does this make a difference?

If you are segmenting your file by catalog and web buyers as described above, you have probably found that on a segment by segment, or even name by name basis, the web buyers do not perform as well when mailed a catalog as a similar catalog segment.

But, your matchback – and let’s assume you are doing your matchback fairly and accurately – shows that 70% of your “web buyers” were mailed a catalog within the past 30 days of their online order. Let’s further assume that none of these customers came to your website via PPC, SEO or an affiliate. They simply received your catalog and ordered online.

To me, that makes them a catalog shopper. And if you isolate those names, you will see that they compare very closely in performance when mailed a catalog to the “catalog” names in equal segments.

What should you do?

Let’s not get into a giant discussion of matchback funnels and allocations. Let’s just assume that your matchback process is fair and accurate, and that it is not overstating or understating the impact of the catalog. Therefore, any web buyer that matches a mail file in the matchback process according to your matchback business rules, and clearly has no other online activity associated to it (such as retargeting), should be considered a catalog buyer.

At this point, you can reclassify your database by moving these web buyers into the catalog buyers channel. This will strengthen your circulation planning by combining all of the like performing catalog names together, regardless of which channel their last order occurred. It also isolates the remaining “pure” web buyers – those buyers that found you without aid of a catalog – allowing you to segment and mail them differently in the future.

However, we recommend “flagging” these catalog buyers (or even putting them in their own “channel” on your database) that have previously purchased on the web as their performance, for most mailers, will differ from those that have purely ordered via mail/phone.   You may be able to mail these customers a smaller page catalog, or even flyers in the future, that generate the same profit as mailing them a full size catalog. This becomes part of your catalog circulation testing.

Further, you will probably find that the remaining “pure web buyers” don’t respond to a catalog at all.

The point is that you should segment your customers based on their source (catalog mailing, PPC, SEO), not on the channel in which they order.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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This is About List Rental – But Not The Co-ops

This is not a trick question – but would you be interested in an idea that doubles your 12 month buyer file immediately, at no cost? Hold that thought for a minute….

A client asked me the other day why his list manager was insisting that his list was worth $150/M, when the co-ops only charge about $60/M for prospecting names. He wondered why his list manager seemed oblivious to the realities of prospecting in 2016.

I won’t go into the historical reasons as to how this gap between traditional list managers and the realities of the co-ops came about as I’ve document it before in this space (The Catalog Co-ops: How We Got Here). Traditional list managers are part of the Catalog Establishment, the dinosaurs of this industry who still tell their list owner clients that their list is worth $150/M or even $180/M. This is why traditional lists represent about 10% of our catalog client’s circulation plans while the co-ops represent 90%.

In my opinion, if you are a list owner, and you make your customer list available for rental, and have your list priced any higher than $60/M, you are nuts if you think that this is somehow strategic. Why even bother making your list available at all? Really?

As much as I find fault with the co-ops, the co-ops will at least provide a mailer with a list that is “modeled”.  What have you got to offer a mailer with your list? Absolutely nothing other than a list of people who bought your “stuff” in the past 12 months.

Since your product (a non-modeled list) is basically inferior to that which the co-ops can offer, you should be priced even lower – say at $40/M.

Now, this is where the list managers/Catalog Establishment will step in and say “Bill, you’ve got it all wrong”. They will explain that list owners are always open to an exchange with appropriate mailers. They will explain that having a high rental price is a means of controlling the volume of names that competitors can take of their list owner’s names. They will explain that their list owner’s buyers – their customers, the very heart of their company – are unique, and they are the essence of the catalog’s brand, and are therefore worth the foolishly high rental price.

That thinking enabled the co-ops to grow and flourish. End of story.

But wait. Are your prospecting results using the co-ops getting so poor that you would consider a very different idea?

Back in the early 1990’s when I was the marketing guy for the Brookstone Tool catalog, I had a very good relationship with the two marketing guys at Plow & Hearth – Pete Rice Jr, and David Hay. We were direct competitors. Their list worked well for the Brookstone Tool catalog, and my list worked well for them. At a meeting at the old Catalog Conference, I proposed doing a swap of our respective 12 month buyer files, for one year, with no restrictions on their use. They could mail our names 100 times if they wanted.

They liked the idea, but did have one caveat. They wanted to provide each other an equal number of buyers with the same frequency of purchase. As I recall (this was 25 years ago, so the details are a little fuzzy), we provided each other three separate files with 10,000 1X buyers, 10,000 2X buyers and 10,000 3X+ buyers.   To be honest, I don’t remember why we did not continue the arrangement at the end of the year but it had to do with new ownership at Brookstone.

But here’s the point. Forget about list rental income – you barely make any these days anyway. Forget about exchange balances, net outs, broker reports, computer verification, allowable deductions and all that other Catalog Establishment nonsense related to mailing a prospect list. Think about what would happen to your sales if you could double your 12 month buyer pool by swapping with one of your competitors.

Why not contact your direct competitors and “almost” competitors, and discuss swapping your respective 12 month customer files for unlimited use? What have you got to lose? If your names are in the co-ops, you already lost all control over your names and who can use them. The co-ops (except Wiland) are selling your customer data to anyone that comes along, including non-co-op participants (and getting very rich doing this at your expense). Most important, the names the co-ops are providing you are declining in response. And Amazon is eating your lunch. Really – what have you got to lose?

One of the disadvantages to not having the Catalog Conference is that there are very few opportunities to meet and get to know your competitors on a personal basis. But, if you do know them – why not propose this idea?

Keep it very simple. You don’t necessarily have to swap the same quantity of names since it is doubtful that the two companies would use them the same way, or mail them the same number of times. But, the quantity of names should be close. You should provide full RFM data, and should agree on giving each other quarterly or even monthly refreshes. Don’t place any restrictions on what can be done. And don’t worry about who is getting the “better end of the deal”.  You know the “other mailer” is not suddenly going to schedule nine more mailings to take advantage of your file. You are both doing better than if you simply relied on the co-ops alone.

Can you replace your full volume of prospecting this way? Probably not. Can you find some other willing partners? Probably, but you will have to do it on your own – your list broker and list manager are not going to help you with this. Will it be a “game changer”? Probably not, but it is one more piece of ammunition as you try to survive another year.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

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