Reduce Your Direct Selling Expenses
5. Use a lower grade of paper. Changing grades can have a similar effect to that of changing the basis weight of the paper. Be careful not to go to extremes. For example, test a #5 grade against a #4 or #3 grade. Unless your offer is extremely upscale, a slight reduction in paper grade can reduce your direct selling expenses and ratio without hurting sales.
6. Use a printer that can maximize destination discounts. Getting printing bids today means comparing distribution (mailing) costs as much as you compare printing and paper costs. You’ll find that print manufacturing and paper costs will be competitive from one printer to another. Distribution costs may not be as competitive, however.
7. Use exchanges, databases and rented lists. Maximize the use of list exchanges. But be careful not to exchange with other catalogs unless their lists work for you. Racking up large exchange balances serves no useful purpose when you could be maximizing list-rental income. On the other hand, if you know the outside list works for you, exchange!
When building your circulation plan, use exchanges whenever possible. Maximize the use of names selected from cooperative databases. These names rent for about $70/M. Then, pick up the outside rented lists that meet your break-even criteria.
8. Negotiate outside list pricing. See if you can get a better deal than the prices published on the list data card. Ask to have selection charges (e.g., recency, dollar) waived. If you’re using a list on a continuing basis, request a discount. Also ask for a discount for re-using the same names two mailings in a row (your best-performing prospect lists only).
9. Re-use photography. You can change the cropping to make the photos look different. Avoid costly re-shoots of the same item.
10. Eliminate residual mail. After the postage qualification has been run, eliminate the residual mail. These catalogs mail at the highest rate.
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 stevelett@lettdirect.com.
