We’re all guilty of occasionally hearing only what we want to hear. Sometimes we don’t want to face facts. Rather, we want to think what we want to think. We tend to do what’s comfortable and put off dealing with the issues at hand.
In this article, I’ve identified 10 things you, a catalog company president, probably don’t want to hear. (Or if you report to a president, tear out this article and put it on his or her desk.) Listen to these cold, hard facts.
1. Your company won’t grow if you don’t prospect more. Invest in new buyers. You’re not always going to find enough good lists to enable you to prospect at or above the incremental break-even point. To grow, you need to prospect to lists performing below breakeven. That’s not to say they’re bad lists. Rather, the payback will be longer, requiring you to make an initial investment.
How much longer? My rule of thumb: Look for a one-year payback on any investment you make in acquiring a new buyer. This can vary by company depending on margins, tolerance for risk, growth rate expectancy, etc.
Mr. Catalog President, it’s not possible to grow your catalog business by limiting prospecting to only those lists that generate a positive contribution to profit and overhead. It costs money to prospect and to grow a catalog business.
2. You should be renting your list to other qualified companies. I’m still surprised by the number of catalogers who don’t want to rent their housefiles.
According to a leading list management firm, about 10 percent of all consumer catalog companies, and an estimated 25 percent of all business-to-business (b-to-b) catalogers, don’t rent or exchange names with outside companies. If yours is a consumer catalog, there’s no reason not to rent your housefile. For b-to-b catalogers, the decision to rent may be more difficult. It’s tougher to reach b-to-b buyers; therefore your list could be more proprietary than someone else’s. But if the offer is non-competitive, why not rent?