Contributions to Profit: The 40-40-20 Rule (Extended Web-only Version)
There’s a rule in direct marketing that states: In order to positively impact the success of a direct marketing business, concentrate 40 percent of your efforts on list analysis and selection, 40 percent on offer (merchandise and promotions), and 20 percent on creative development.
As it plays out in many catalog companies, there’s a disproportionate effort placed on the creative process. Obviously, your creative is the vehicle that reaches the consumer, sets the tone for your brand and your company, and drives the selling process. After all, if you have only one chance to make an impression, your creative has to be perfect, right?
In my career, I’ve seen some super-ugly catalogs, direct mail pieces and even Web sites that’ve been cash cows. And, I’ve seen stunningly beautiful creative jobs sink like stones. There are a couple reasons:
1. It doesn’t matter how beautiful your catalog is; it’s only a sales tool. Your catalog has to be your salesperson. And just like any sales process, it has to provide enough information to allow the reader to make a buying decision. It has to be persuasive, answer objections in advance and make an offer that can’t be turned down. It doesn’t have to be pretty; it just has to sell.
2. The top catalog companies know how to brand, but first, they know how to sell. As a philosophy, they see their catalogs as strategic tools to connect customers and prospects with merchandise.
3. Sell cost-effectively. There’s a fine balance between your catalog cost and overall contribution to profits. The more you spend on catalog creative, the harder it is to break even on your mailings.
Many companies see their creative as their calling cards. But the true experts in catalog marketing know that by banking on “good creative” to drive business, you’re putting the cart before the proverbial horse.
Jim Gilbert has had a storied career in direct and digital marketing resulting in a burning desire to tell stories that educate, inform, and inspire marketers to new heights of success.
After years of marketing consulting, Jim decided it was time to “put his money where his mouth was" and build his own e-commerce company, Premo Natural Products, with its flagship product, Premo Guard Bed Bug & Mite Sprays. Premo in its second year is poised to eclipse 100 percent growth.
Jim has been writing for Target Marketing Group since 2006, first on the pages of Catalog Success Magazine, then as the first blogger for its online division. Jim continues to write for Total Retail.
Along the way, Jim has led the Florida Direct Marketing Association as their Marketing Chair and then three-term President, been an Adjunct Professor of Direct and Digital marketing for Miami International University, and created a lecture series, “The 9 Immutable Laws of Social Media Marketing,” which he has presented across the country at conferences and universities.