Use Virtual Catalogs to Leverage Your Web Marketing, Part 2
In the final installment of this two-part series on the burgeoning virtual catalog industry and its relevance for cross-channel marketers looking to bolster their online offerings, this week I take a look at the metrics that need to be tracked, as well as what those metrics can tell you about the effectiveness of virtual catalogs.
(For part 1, and a recap of the costs of publishing a virtual catalog and the features it offers, click here.)
Technology finally has caught up with the potential for digital catalogs. Now marketers need to master the metrics and learn how to leverage digital catalogs to target well beyond the reach of their printed circulations. Analyzing metrics is key to learning how to use virtual catalogs. What can the metrics tell you?
- The number of unique visitors tells you how web traffic responds to virtual catalogs, as well as what happens when virtual catalogs are included as email links. Test the difference in response when announcing the catalog in the subject line vs. announcing an offer with the virtual catalog vs. including a link for the virtual catalog as part of each email. Virtual catalogs are proving to be very powerful tools at driving quality web traffic.
- Sales dollars from clickthroughs tell you how many sales resulted from visits begun and completed inside the virtual catalog.
- The number of email addresses collected can tell you how effective virtual catalogs are at harvesting email addresses from consumers who haven't yet bought from the catalog.
- Marketers can test other formats, such as postcards, sales fliers or videos, to see the relative performance of formats other than catalogs that may be faster and quicker to produce.
- Incremental sales from emailing virtual catalogs to a housefile that wasn't on the circulation plan for the catalog — i.e., incremental sales from prospects who aren't receiving the printed catalog.
- Traffic resulting from publicizing a virtual catalog using a printed catalog.
- Percentage of total traffic, clicks and conversion via the virtual catalog as a percentage of total web traffic and sales.
The basic selling point to virtual catalogs is that they're so inexpensive compared to printing, paper and postage that it allows cross-channel marketers to leverage their creative and make their catalogs available 24/7 to their existing customer bases. They also enable marketers to send them via email to wider circulations than possible with a print catalog. Virtual catalogs also can improve antiquated websites because they're search engine-friendly.
Virtual catalogs have break-even response rates on par with emails, as opposed to breakeven for traditional print media, which is one or two orders of magnitude higher. Here are two examples:
- If you have 100,000 email addresses and a virtual catalog costs $1,500 for each edition, what's breakeven on emailing a link to the virtual catalog announcing the publication of a new print edition? If your margin is 50 percent, that email needs to generate $3,000 in sales to break even. If the average order is $100, that's a total of 30 orders. So you need a response rate of .0003 percent.
- If you post a virtual catalog on the homepage of your website and need 30 orders to break even, then you need one order per day for the first 30 days of the life of the catalog.
With two primary ways to promote your virtual catalog — via email and posting its icon on your homepage — your break-even response rates are very low. Factor in all the different ways your virtual catalog can generate traffic and orders, and breakeven should be easily achieved for most marketers.
Virtual catalogs have the potential to break the cycle of consumers’ addiction to email promotions. Wean customers away from “waiting for the next promotion” by sending them sale fliers, postcards, insert formats, clearance offers and overstock fliers that are multiple-page formats that can be emailed as digital editions.
The goal is to replace discounting with merchandise-laden pieces with multiple pages — but less than a full-length catalog. This allows cross-channel marketers to liquidate overstocks and clearance items without having to give blanket discounts on everything.
Virtual catalogs aren’t the silver-bullet answer to all direct marketers’ problems, but they are like email on steroids. They're very inexpensive, the technology has finally arrived and they'll drive measurable, incremental sales for marketers.