A Chat With September’s Profile, Scott Drayer, director of marketing, Paul Fredrick MenStyle
CS: How has Paul Fredrick MenStyle dealt with the rising costs associated with mailing catalogs?
SD: The first thing that we did was recognize that even years ago the cost and available pool of customers that we were going to be able to acquire through the mail was dwindling and becoming pricey. So the first thing was developing other ways to acquire customers.
More recently, with some of the postage increases that we’ve seen, it’s really kind of evaluating what we can do in terms of a piece to save costs — whether it’s trim size testing or moving our clearance books to slim-jim format, which doesn’t appear that that’s going to be the answer moving forward. Those are some kind of short-term things that we’ve done. But I think it really kind of plays into what I was trying to say with the last point, “What can we do to be more effective?”
It’s not all necessarily about controlling costs. If you can increase response, it does the same thing. And it’s actually going to end up better for you in the long term … just being a more effective mailer. If somebody doesn’t want to get the catalog or this isn’t the right time to send them the catalog, recognize the fact that they’ve been priced out and don’t mail the piece and spend the money somewhere else. Kind of looking at it on a line-item basis is the most effective way to allocate a dollar. I think we’ve done a fairly good job with that, especially on the acquisition side.
CS: Does the catalog still prove to be an efficient customer acquisition tool for Paul Fredrick?
SD: Most definitely. In the analysis that we’ve done on lifetime value of a customer, with our models, a catalog customer is far and away the most profitable for us to acquire. But there’s not enough of them out there. And it does cost more up front to bring that person in. At the end of year one or year three, do we have a more profitable customer? We do. But it’s really kind of limited availability, or pool availability, that we’ve struggled with.
If I could find more catalog customers, I would. But when they’re not available, or it’s more cost-effective for me to pull in three customers from print for every one I’m bringing in from the catalog, at the end of the day those three customers are going to acquire me as much on the back end as that one from the catalog. We’ve kind of based our logic in the math of it all and tried to spend according to those rules that we’ve developed.