Attention Internet Marketers, Start up Your Catalog Engines Like This…
Whereas the overwhelming majority of Catalog Success magazine readers are, first and foremost, print catalog marketers, our e-newsletter and Web site reach myriad marketers, from brick-and-mortar retailers to wholesalers to pure-play Web merchants. I devote this week’s column to the pure plays looking to launch a catalog channel.
Oftentimes, non-catalog companies hesitate to break into the business because they lack the expertise or the internal time and resources to get the job done. But there are some fairly quick and easy ways Internet marketers can break into the catalog business.
For starters, follow the 40/40/20 rule. Put your efforts into choosing the right merchandise and offer (40 percent) to match up with the right mailing list (40 percent). After you’ve done that, the creative (the last 20 percent) is just a means to an end — a way to communicate your message (offer and merchandise) to your audience (list).
Here’s another hint: All of the resources you’ll need to start your catalog can be found. There’s plenty of vendors looking right now to help you build your catalog business, and you can easily tap into their expertise. You can even outsource the whole thing if you want.
That said, follow these five steps:
1. Insert a catalog into your outgoing product shipments. This one’s a can’t-miss venture. I’ve never seen a bounceback catalog not work. The psychology is simple: When people have just purchased from you, they’re likely to order again. So to properly set up a bounceback catalog, look at your seasonal order forecasts and print enough catalogs to insert into each shipment.
2. Generate catalog requests. Add a catalog sign-up page to your Web site and start collecting catalog requests. Add the catalog requests to your print run for the bounceback you just created and send them a catalog. If the response is satisfactory, send them a second catalog the next time you print up a catalog.
Voila, you’re now in the catalog business. Chances are, you’re making a small profit on your bounceback catalog and your catalog request mailings.
3. Mail your catalog to customers who’ve purchased from you in the past six months, or if you’re more brave, mail the past 12 months of buyers. Sort out your buyers by three-month increments, and again by one-time buyers and multibuyers (those who’ve ordered more than once). Analyze the results. Each segment should be profitable.
4. Next, add some list rentals to the picture. You do this once you find lists that have the right affinity to your customers. And the truth is, the cost to add more catalogs to your print run is inexpensive compared to the setup of your initial run. Assume your housefile will absorb the costs of producing the catalog. In other words, the housefile and bouncebacks have to cover the initial creative development expenses. Then calculate what your break-even point per catalog mailed would be if it didn’t have to cover the creative — only the incremental costs of printing the additional list-rental catalogs.
Once you do the break-even math, you’ll know exactly what response rate you’ll need to break even on an incremental basis. If you’re not sure how to calculate your breakeven, e-mail me and I’ll shoot you an Excel template.
5. Congrats. You’ve just entered the catalog business in four steps. Here’s the fifth step, the icing. Add the catalog channels into your marketing mix and you’ll likely see an increase in your customer lifetime value.
Multichannel shoppers have been proven to spend more money and purchase more often! Good luck!
Speak to you next week,
Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. You can reach him at firstname.lastname@example.org or 561-302-1719.