When Will Response Rates Recover? Part 2
How can you project response rates if you see signs of increasing consumer demand? Will response rates perform like the stock market with a slow climb back, or will they rebound more robustly?
These are just a few of the questions catalog/multichannel marketers are asking themselves these days. In the final part of this multipart series, I’ll address circulation trends that have emerged as marketers attempt to weather the economic storm, before wrapping up with some tips to help you optimize your circ for increased sales during the upcoming holiday season.
(For part 1, click here.)
While we could see signs of a recovery in response rates, an uptick in response doesn’t mean you should expect to enjoy the response rates you experienced before the second half of 2008. The first question is whether response rates will continue to decline, stabilize or begin to increase.
Noting a general trend in your response rates will give you some data to project what the fourth quarter holiday season will look like. But don’t let optimism replace what your own hard data tells you about where response rates are trending.
What tactics have emerged from mailers?
- Look at your first quarter results, and project them forward to the fourth quarter. Don’t assume you’ll do better than your normal increase in response rates between quarter one response and quarter four response. Focus on your most recent response rates, and discount or ignore older historical response rates.
- Co-ops are recommending that marketers optimize their housefiles at one of the co-op databases to find and suppress those households that have shut their wallets.
- Segment your files into multis and singles, or “uniques,” and don’t mail those singles that are currently responding below breakeven.
- Squeeze more names out of the co-op models that are working profitably by increasing slightly your segment sizes.
What should marketers do? Here are two ways to make sure your circ is optimized to take full advantage of the lucrative fourth quarter:
1. Read your numbers. Marketers have the benefit of an enormous stream of data telling them how they're doing. Look at response rates for each list and list segment, and build your mailings from the ground up using the response rates from your most recent mailings.
2. Take a hard look at your costs. Printers are openly acknowledging that paper and printing costs are ratchetting down hard as printers scramble to fill open press time. Capture paper savings by going back to your printer for fresh paper quotes on catalogs that haven't yet passed the last date to change for ordering paper.
Also, get competitive printing quotes. Although printing prices have softened, your printer won’t give up its margin unless you have a competitive quote from another printer.
Overall, the feeling among attendees at a recent industry conference I attended was that circ plans should be geared more toward house lists and less to prospecting. Marketers who rely heavily on print catalogs are looking to survive the second half of 2009 with conservative circ plans so they'll be around when consumers start buying again.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. Reach him at (505) 986-9902 or jcoogan@earthlink.net.
