Encourage Your Customers to be Multi-channel shoppers

Think your retail buyers don’t need to see a catalog?  Think your direct buyers don’t shop in your stores?   Think again! A recent look at one of our favorite client’s results highlight clearly just how important it is to encourage your customers to shop with you through more than one channel.   For this particular client, a customer who has purchased through more than one channel is 60-85% more productive ($/book) than single channel buyers.

• multi-channel buyer    $9.27/book
• direct buyer    $5.00/book
• retail buyer    $5.81/book

What does this mean to you?  Consider your direct only customers your absolute best retail prospects.  Consider your retail only buyers your best direct prospects.  However, you need to make it easy for a customer to shop with you through multiple channels:

• Offer the same merchandise assortment in your catalogs that you offer in your stores.
• Be diligent about presenting a consistent image of your brand in everything you do.  That includes catalogs, e-mails, blogs, social media and store design.
• Incorporate catalog creative in your retail visual merchandising plan.
• Offer retail customers free shipping on their first direct order.
• CAPTURE your retail names—these are the people who have already demonstrated that they like your product by making a purchase—don’t let them walk away without getting at least a phone number or e-mail address.  Follow up with an e-mail that allows the customer to give you more elaborate information or utilize one of the many reverse append services available.  We promise, it will pay off!

Cut Your Catalog Costs

The economic climate has created a flurry of cost-cutting ideas for conscientious catalog marketers.  Here are some of our favorites, which could save you money during your holiday planning:

1. Cut prospecting and replace with a house reactivation model from one of the co-ops.
2. Modify your catalog trim size to save paper and use a more efficient press configuration.
3. Explore a non-domestic paper with your paper broker.  If you are not negotiating your own paper, you need to be.
4. Pick up as much photography and catalog creative as possible from your last book(s).
5. Make sure your printer is getting you the maximum co-mail postage savings possible – even if this means moving your drop date by a few days.

Breakeven formula calculation

Using a break-even analysis is critical to the understanding of your direct marketing or catalog business, as this represents the point where your total sales revenue equals the total costs associated with the sale of that product.  You can use this formula for multiple areas of your business, like list costs, catalog page costs, or email costs:

cost / GMM / the reciprocal of return rate called “net to gross” = break-even

Here are a few examples:
catalog page break-even:
$25,000 page cost/ 60% GMM / 80% net to gross  = $52,000 break-even sales

list rental break-even:
$1,000 list cost /65% GMM / 70% net to gross = $2,197 break-even sales

email break-even:
$500 email cost / 50% GMM / 90% net to gross = $1,111 breakeven sales

The break-even calculation can vary a great deal, depending on whether you include all of your fixed and variable costs into the cost figure.  For example, when calculating the breakeven for a catalog page, you may want to only include the INCREMENTAL cost in your calculation, or how much the EXTRA paper, printing, creative would cost if you added 4 pages vs. including all of the fixed costs for the entire catalog.  In addition, some people like to include indirect operating costs such as customer service representatives or warehouse costs into their formula.  Fool around with a couple of different options to find out what works best for you and your particular catalog or direct marketing business.