My advice for prospecting in 2021 comes down to one thing – challenge conventional wisdom.
One of the benefits of being a consultant is witnessing so many different scenarios of how catalogues work, how their customers and prospects respond, which tests work and don’t work. Every business is different, which is often difficult for some of you to acknowledge. We still have many large catalogue clients that can make traditional prospecting list rental files and co-ops lists work, and work very well, in some cases above break-even. We also have many clients that cannot get either type of list to profitably work, especially the co-ops.
The mailers that can prospect using these traditional methods (list rentals/co-ops) find it incredulous when I say some catalogues can’t prospect with their catalogues. Their first assumption is that the other mailer is doing something fundamentally wrong, or that even though I’ve been doing this for almost 35 years, I obviously missed something. I always get the sense that these “traditional prospecting method” mailers want to roll up their sleeves and show the “we can’t prospect” catalogues what they are doing wrong. Or they at least want to show me they could do it better.
I had one reader representing a very large mailer tell me recently that they increased circulation 4-fold for Spring 2021. I had the sense he was doing so as if to imply “why isn’t everyone doing this”? But this is a traditional cataloger, with an older audience and low-ticket average order, selling household products that do well in a pandemic. If I had their demographics, product mix, and price points, I’d step on the gas pedal too. But circumstances differ widely, and what applies to that mailer is NOT a universal experience, nor should it be.
You have to understand that not all things apply in all circumstances.
I bring this up because so many of you are sitting at the “we can’t get prospecting to work with our catalogue” table. I want you to know that you are not alone. It’s ok that you no longer make your mailing list available for rental or exchange to others. It’s disappointing that the co-ops can’t provide you with models that work, but you have managed to live without them.
Many factors influence this, most of which are out of your reach. If you could improve your gross margin by 18 points, then prospecting would be worth doing again. But that’s not something that you can simply “will to happen”. Or, your product category is so niche-focused that the co-ops simply can’t find you buyers of your specific product category. Plus, you’re tired of testing “lifestyle” selects from the co-ops that lose $174 per order. Let’s stop wasting money.
On top of all that, the universe of pure catalogue shoppers is shrinking. What’s a “pure” catalogue buyer? A consumer that still mails or phones in an order, or if they place an order online, they do so only because they received your catalogue. They don’t respond to emails, they aren’t on social media, and can’t imagine how anyone can order from their iPhone.
I wish all of you could prospect with your catalogues. I was born into a direct marketing family. I learned about response rates and average orders in the early 1960s (I was very young!). I love direct marketing. I love the concept of creating something in print and mailing it! Then the magic of getting an order as a result. Oh joy, rapture! Twenty years ago, you didn’t need to be told that print drives demand – you knew that. But customer behavior changed.
However, you wouldn’t know that from listening to or reading what the industry has to say. For 20 years you’ve been told that print is the ultimate response driver and can be used to convert online customers into catalogue buyers. It’s a sad indictment of our industry when vendors, in an effort to convince you that print is the ultimate response driver, cite all kinds of bogus research that shows how the brain responds to a catalogue better than an email. Explain that to all the printers that are reporting their sales are down 30 per cent.
I started today by saying you need to challenge conventional wisdom. Let me share a few things that conventional wisdom would tell you to ignore or was wrong:
We have several clients that are driving more sales with smaller books (fewer pages) than they are with their bigger books (more pages). Smaller books = more sales (in some cases).
Two clients shared with me that their bigger books cost less (per piece) than their smaller books. But, in one case, the smaller book generated a higher sales/book. Conventional wisdom would tell you not to mail a smaller book that costs more than the bigger book. But what if it drove more sales, and generated more profit?
For the past four years, we had a client that included a hold-out test on every mailing. Each time, the hold-out results showed the catalogue only drove a small per cent of incremental demand. The client has an exceptionally strong and exciting website, and more than 95% of their orders were placed on the web. I questioned why they kept mailing a catalogue, as it clearly was not driving additional profits. I’ll be honest, I pushed the point hard once, but didn’t keep pushing it, as I enjoyed taking their money – and they could read the results as well as I could. But when the pandemic hit, and their website was flooded with orders, they finally ditched the conventional wisdom and stopped mailing their catalogue. They had a phenomenal year in 2020.
Last fall, you saw that the pandemic was presenting a unique opportunity to get some new customers, and you stepped on the gas. In some cases that meant mailing more catalogues, but in most cases, it meant increasing your online acquisition. Don’t automatically assume that you should mail a catalogue to those newly acquired web customers. Most of you know this because you already segment your “catalogue” and “web” buyers, and have different marketing strategies for each, which includes whether they get mailed or not. Start focusing on additional differentiators – did the newly acquired customers tend to buy from a product category or a product that does not lead to a second order? If so, there is nothing that says you have to waste money with a catalogue trying to convert them to buy again.
Last year I wrote that the one position I would hire in 2021 is an online merchant. Do that then start reviewing all your previously held beliefs and conventional wisdom about prospecting. Remember that every company is different and every company faces different obstacles. Don’t dismiss your options until you have tested them. Conversely, keep running hold-out tests, not just on your catalogue but in all areas of the business, to confirm that you truly are driving incremental sales. Challenge conventional wisdom even when it seems so obvious and set in stone.
by Bill LaPierre, Datamann USA