Strategy: Logical Maneuvers for Hard Times

My entire career since graduating from Indiana University in 1971 has been devoted to catalogs. There have been good years and off years. I can honestly say, however, that this is the most difficult and challenging year I’ve seen for catalogers. Gas prices, consumer debt and the national election all combine to create the perfect storm.

In such tough economic times, it’s logical and necessary to reduce expenses and save where possible. But these cuts aren’t always made in the best places. Some catalogers have reduced page counts without doing a proper square-inch analysis. Many have eliminated mailings to Web-only buyers without proper testing. Others have changed paper stock/grade, eliminated mailings to prospects and so forth. All of these reductions are well-intended, but they’re emotional attempts to cut expenses without regard to the long-term effect on the business. It’s short-term gain and long-term pain.

It’s difficult to slash and burn your way to prosperity. Some of these decisions may save money short term, but long term, they can hurt.

When the going gets tough, the tough don’t cut circulation or stop prospecting. They weather the storm. Even the perfect storm. Here are six things to do — and not do — in the face of these most difficult times.

1. Mail Internet Buyers
You can mail your zero- to 12-month catalog buyers with much success; they’re the heart and soul of your housefile. But the same may not hold true for the zero- to 12-month, one-time Internet buyers.

The lifetime value of an Internet buyer is often not as great as that of a catalog buyer, because a large percentage of online buyers never make a second purchase. They often search the Internet for specific gifts or other items and aren’t always “shopping,” per se. So test eliminating these one-time/first-time buyers from your circ plan. Key code and mail them as a group, track the results, and see how they perform after you do a matchback.