Ideas for Small or Start-up Catalogers (1,131 words)
At a minimum, do the following:
•Perform a square inch analysis by season. Start with the gross margin dollars of each item, and then subtract its pro-rata portion (based on the space it took in the catalog) of the printing, paper and postage costs for that mailing or group of mailings. Slice this information by page, category, price point, etc. This will tell you not only which items are profitable but which are your best categories, pages, price points, etc.
•Know from where your demand is coming. Look at your merchandise results not only by dollars, but almost more importantly, by units. This analysis represents the things your customers are most interested in (i.e., your response rate). Let this guide new product offerings, category growth, etc.
•Watch your top items and make sure they continue to improve. If you see a decline, fix it before it's a problem or start working on a replacement.
Idea #3—Track Your Orders
Strive to track 90 percent of your orders using a source code. This information helps you handle response from your next mailing. Teach your TSRs effective ways of capturing source codes, and make sure they understand the reasons for doing this. The more they know about how the information is used, the harder they will try. Letting 20 percent to 30 percent (very common) of your orders be untied to a source code can cause you to make bad decisions or miss important opportunities.
Idea #4—Mail Your Customers Based on RFM
I can't stress enough how important this is. Even as a relatively new cataloger, you need to do a Recency, Frequency, Monetary value (RFM) chart to understand the health of your housefile and to think about how to move more customers up the ladder to better segments. An RFM segmentation enables you to mail to your best customer segments more often, and mail your marginal or unprofitable customer segments less. It will give you a road map for developing offers that target your unproductive segments and entice them to become better customers. In many cases, reactivation is more cost effective than prospecting. Even if you are so new that you're still mailing your entire housefile, make sure you can segment by RFM and update frequently—you will need it!