Contributions to Profit The 40-40-20 Rule
- Develop profit- and loss-driven circulation plans that take into account each catalog mailing, and drill down each housefile segment (based on recency, frequency and monetary value analysis) and each rental list.
- Constantly search for new lists and new list segments to test inside as well as outside your business category.
- Develop break-even analysis for mailing by drop. Do so down to the individual list segment level, and then monitor its performance.
- Analyze merchandise performance as it relates to catalog selling space by doing square inch analysis by page, spread, product segment, price point and, of course, item.
- Manage inventory and develop accurate inventory forecasts that allow you to not over- or under-fill your warehouse.
- Conduct frequent vendor reviews and constantly seek to lower cost of goods sold, operations, and customer acquisition and retention costs by negotiating the best possible arrangements.
Once you've built your merchandise and list platform, you're ready to develop a creative execution plan that can speak to your customers and prospects in a meaningful way (meaningful as defined: generate a response).
Jim Gilbert is president of Gilbert Direct Marketing, a catalog and direct marketing consultancy, and professor of direct marketing at Miami International University of Art and Design. He can be reached at (561) 302-1719 or firstname.lastname@example.org.