A CEO’s Guide To Catalog Circulation ’08 (Part 1 of 3)
In the first of my three-part series on the evolving role of catalog circulation in today’s multichannel environment, this week I’ll take a look at how catalogers can identify the various customer audiences they serve.
Throughout the history of catalog marketing, CEOs have depended upon catalog circulation experts to drive sales, build up their customer bases and employ profitable marketing strategies. Before catalogers embraced the online channel, circ experts played a key role in the success of a catalog business. The methods circ experts used were largely the same each year, allowing CEOs to have a working understanding of catalog circulation concepts. Then the Internet changed everything.
In the first half-decade of e-commerce, the online channel didn’t garner enough sales to fundamentally change catalog circulation strategies. By 2000, however, it became difficult to ignore e-commerce sales. Internally, discussions focused on the marketing tools that drove e-commerce sales. For many catalogers, sales over the phone or via the mail began to decrease. Some noticed that every time a catalog was mailed, e-commerce sales peaked. Conversely, when there were gaps in the catalog marketing strategy, e-commerce sales slumped. Logically, one hypothesized that catalogs were responsible for e-commerce sales.
To prove this hypothesis, catalogers asked list processing vendors to assist them. The matchback analysis tool was created. Catalogers forwarded the names and addresses of customers who ordered online, via appropriate keycodes or otherwise, in the weeks following the in-home date of the catalog. The list processors told them whether those customers had received a catalog recently.
The matchback analysis proved that in many cases online orders came from customers who recently received catalogs. For catalog circulation experts, this was all they needed to know. Productivity wasn’t really declining; customers were simply using catalogs to place orders online. Management was notified of this finding. The term “multichannel marketing” was born, describing the phenomenon when multiple forms of advertising drive sales across multiple channels.