16 Actionable Tips
What can you do to reduce your selling-expense-to-sales ratio? One way is to increase revenue without spending more money … easier said than done. Another way is to reduce your direct selling expenses. Following are a few suggestions to consider:
1. Use square-inch analysis to plan your page count. Be careful not to over-circulate pages. For consumer catalogers, the page count should vary depending on the season (i.e., holiday vs. summer). Circulating too many pages will increase your costs, because the productivity of those extra pages may not be enough to offset the additional cost.
2. Don’t over-circulate catalogs. If your selling-expense-to-sales ratio is too high and your bottom line is suffering, reduce circulation. Determine your incremental break-even point and eliminate mailings to outside lists and to segments of your housefile falling below your established criteria.
3. Alter your catalog trim size. If yours is a pound-rate catalog (weighs 3.3 ounces or more), a slight reduction in the physical trim size of your catalog will reduce your postage costs.
4. Decrease paper weight to lower postage costs. Test lighter-weight papers, and self-covers vs. heavier separate covers. Following are the actual results from a recent test using 34-lb vs. 32-lb paper:
Both the response rate and the average order size for this test to the 0- to 12-month buyer file were not negatively affected. The revenue per catalog mailed in both cases came out about the same—$3.62 vs. $3.60 per book. Consider a reduction. Paper is sold by the pound. If you use fewer pounds, you may save money.
You also can save costs on postage by using lighter-weight paper, provided your catalog mails at the pound rate. A simple change from a 34-lb, #5 basis weight to a 32-lb, #5 basis weight will save about $12,000 in postage on a mailing of 1 million 80-page catalogs.
Steve Lett graduated from Indiana University in 1970 and immediately began his 50-year career in Direct Marketing; mainly catalogs.
Steve spent the first 25 years of his career in executive level positions at both consumer and business-to-business companies. The next 25 years have been with Lett Direct, Inc., the company Steve founded in early 1995. Lett Direct, Inc., is a catalog and internet consulting firm specializing in circulation planning, plan execution, analysis and digital marketing (Google Premier Partner).
Steve has served on the Ethics Committee of the Direct Marketing Association (DMA) and on a number of company boards, both public and private. He served on the Board of the ACMA. He has been the subject of two Harvard Business School case studies. He is the author of a book, Strategic Catalog Marketing. Steve is a past Chairman of both the Catalog Council and Business Mail Council of the DMA. He spent a few years teaching Direct Marketing at Indiana University in Bloomington, Indiana.
You can contact Steve at firstname.lastname@example.org.