B-to-B Insights: 3 Ways for B-to-B Retailers to Save Marketing Dollars … and 1 Way Not To
True confession: I love it when mail quantities in the United States are down. Although this trend is overall bad for our industry, in the here and now it's good news. The reason? There will be less competition in the mailbox for my clients. As a result, their response will soar.
Catalogs and direct mail continue to drive sales for niche and specialty B-to-B companies, but a question persists: Through web optimization, can't you get all of these sales by spending a lot less money? Without testing the theory, companies across the country are cutting their mail quantities, which is great news for companies that continue to mail.
However, those same companies that are benefiting from their competitors' error are seeing their own postage and paper costs increase. As a result, their catalog marketing benchmark inches up as a percentage of sales. It makes good business sense to cut costs where you can.
There are three main ways to save money in catalog marketing: mail fewer catalogs, mail fewer pages and shift mail quantity from rented names to house names — whether they're prospects or buyers. You can tweak trim size and paper weight, but those savings tend to be small compared to the big three.
1. Mail fewer catalogs. When you mail fewer catalogs, you have two choices of where to cut: housefile names or rented prospects. The benefit of reducing rented prospects is twofold: one, you save on your three "Ps" (printing, paper and postage) and, two, you save on name rental, which can add up to significant dollars for quality B-to-B names.
Of course, the pitfall of cutting prospect names is that you delay future growth. Though you may not miss those initial sales this year, you will miss their subsequent purchases next year. It's best not to throw the baby out with the bath water. Temporarily reducing your prospect circulation is safe. Cutting it altogether can be dangerous.
A columnist for Retail Online Integration, George founded HAGUEdirect, a marketing agency. Previously he was a member of the Shawnee Mission, Kan.-based consulting and creative agency J. Schmid & Assoc. He has more than 10 years of experience in circulation, advertising, consulting and financial strategy in the catalog/retail industry. George's expertise includes circulation strategy, mailing execution, response analysis and financial planning. Before joining J. Schmid, George worked as catalog marketing director at Dynamic Resource Group, where he was responsible for marketing and merchandising for the Annie's Attic Needlecraft catalog, the Clotilde Sewing Notions catalog, the House of White Birches Quilter's catalog and three book clubs. George also worked on corporate acquisitions.