Strategy: When Prospects Aren’t Buying
9. Don’t drop co-op models. Your cooperative database rep should work with you to develop ways to improve the various models’ performances. You might have to get the co-op to tighten its parameters.
Track Housefile Growth
How much you’d like to grow your business depends on your 12-month housefile’s growth rate (see “Success Depends on the Growth of Your 12-month Housefile,” Catalog Success, March 2005).
If your 12-month housefile is growing, your revenue most likely will increase. But if your file’s decreasing, your revenue probably will go down. Rule of thumb: The percentage of revenue growth will approximate the percentage increase in your 12-month buyer file. This means if you grow your 12-month file by 10 percent, your revenue also should increase by about the same percentage. The change in your 12-month buyer file is a key indicator as to how well your business is doing (or not doing).
Response rates certainly have been impacted during the past several years. The fact that files aren’t growing, resulting in list fatigue, certainly is a big factor. While you can use various techniques to improve response rates, growth will continue to be an issue due to the lack of new catalog buyers.
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 Web site: www.lettdirect.com.