10 Ways to Put More Zing in Your Prospecting With Alternative Media
One of cataloging’s hottest buzz phrases this past year has been alternative media. List brokers hate the trend, but most savvy catalogers are not only embracing alternative media, they are having enough success with it to build on.
Historically catalogers have relied on list rentals to build their customer files. And it worked. Lists proved to be productive and had excellent persistency or lifetime value over time. So why complain or switch from something that’s working? The answer is an economic one. The winning lists of yesteryear are just not responding as well as they did in the past.
When I started in cataloging many years ago, you could expect that outside lists, especially response lists, would consistently pull 2 percent. While average order values were lower than today, it only took a $50 order to come near the magic $1 sales per catalog to break even. Look what’s happened to the economics of cataloging as a result of two trends.
First trend: Postage and printing costs keep rising. It now takes greater sales per catalog mailed to break even. The old standard of $1 has risen to $1.25 or even $1.50.
Second trend: As cataloging has grown, more catalogs are being mailed. There’s greater competition in the mailbox and the office in-box. Response rates have deteriorated. The good old standard of 2 percent is seldom achieved unless the catalog is highly niched and highly targeted. Today the standard is more like 1 percent (and sometimes even lower).
Unless you can boost the average order value to $100 (or more), you are faced with a number of major dilemmas:
• A shortfall in the number of first-time buyers
• A greatly increased customer acquisition cost
• A need to look elsewhere to find new names, especially ones that can be reasonably acquired.