Strategy Sharpen Your Circulation Skills
By Stephen R. Lett
How to improve planning and forecasting.
As circulation professionals, we know that when sales are good, it's the merchandise. Yet, when sales are off plan, we tend to feel responsible. Is it the lists mailed to, the mail date or the way the merge was run? Just what's causing the sales shortfall, and what can be done to avoid this in the future with proper advanced planning?
In this column, I identify some pitfalls circulation professionals may encounter in the planning and forecasting stages, and provide tips on how to reduce the risk of failure.
1. Manage Outside Prospect List Usage
List testing and usage should be based on proven historical results and sound logic. Continuation lists should be built into your circulation plan, of course. Knowing which lists to continue mailing always should be based on past results. However, when testing new list ideas it's important to get the help of an experienced broker in your particular product category.
Be sure you're driving the bus when it comes to outside list usage and testing. Certainly obtain co-workers' input, but base your list-testing decisions on historical results and your list broker's recommendations. Assume full responsibility for outside prospect lists you're testing, and mail with confidence. Rule of thumb: For every 10 lists you're testing for the first time, at least two will result in a continuation re-test.
2. Know Your Market's Demographics
Many a circulation professional has been challenged to select lists that, for example, either appeal to a younger or more upscale audience, while the catalog's target demographic traditionally has been older and lower-income consumers. Obviously, your current catalog won't necessarily appeal to customers you might like to add to your housefile — those in a different age or income bracket. The lists you choose don't determine to whom your catalog appeals — rather, the merchandise and offer are what matter. Therefore, if your merchandise offer isn't targeted to younger and/or upscale consumers, mailing to lists that contain names of younger or upscale prospects will result in poor list performance.
Altering your market's demographics is a merchandising change that can take place only over an extensive time period. Match the prospect lists you're testing with your merchandise in terms of consumer demographics. And then do this consistently.
3. Take Ownership of the Plan
Get extremely involved in developing the actual circulation plan. Build the plan from the bottom up and not from the top down to demonstrate whether or not management's goals can be achieved. Take ownership of the plan, and revenue and order forecasts.
If there's a disconnect between the plan you create and what management expects to achieve, speak up. By doing the proper bottom-up planning, you'll take ownership of the numbers that actual results are being compared to daily and weekly.
4. Test and Test Again
When you're faced with objections such as, "Our customers would never …" or, "They always …," fall back on this truth, "But you can't be sure unless you test." For example, we've looked at the recent trend of consumers ordering late during the holidays. Just a few years ago, it was difficult to convince management to mail past the middle of November. By suggesting a small test later in the season, we proved that catalog shoppers will buy closer to the time of actual need — a trend that's continued. Late shopping during the Christmas buying season definitely is here to stay.
Another point about testing: Often, ideas are rejected before they're even tested. But the great thing about the catalog business is that just about everything can and should be tested. Replace opinions and conjecture with concrete tests that can yield results and provide the correct direction for future plans.
5. Be Realistic
Circulation planning is based on historical results, not on wishful thinking. For example, if a mailing generated $2 per catalog mailed for the past three years, it's unrealistic to assume it'll bring in $3 or more per book. You can manipulate the figures in the budget or on your circulation plan to satisfy management's goals, but there won't be an accurate relationship to the actual results you achieve.
It's always better to under-promise and over-deliver, or to be conservative when it comes to circulation planning. Rely on historical figures to guide future plans. And, be realistic with your projections.
Follow these basic steps to successful circulation planning, and let the results speak for themselves.
Stephen R. Lett is president of Lett Direct, a catalog consulting firm specializing in circulation planning, forecasting and analysis. He can be reached at (302) 537-0375, or by e-mail via his site: www.lettdirect.com.