How Catalogs Drive Your Business
The printed catalog is the main driver of traffic to the web. However, with all of the other touchpoints available to consumers today, how do we really know the impact of catalog mailings on web sales? And why do we give so much credit to the print catalog? There are a few reasons why:
- The processes of matching back order files to mail tapes give companies the strongest sense of how catalogs drive web business.
- When looking at your order curves, you will see that online sales spike every time a catalog hits in-home.
- Contact strategy testing: My company has done a great deal of testing using holdout panels in mail vs. no mail split tests. The mailed segments always perform better.
- A reduction in catalog circulation always results in a reduction of sales from the web.
While the internet has become the preferred way to place an order, consumers still prefer to shop from a catalog. That's why it's important to understand the difference between sales through the web vs. sales from the web. Catalogers often say to me that 70 percent or more of their business is coming from the web. What they really mean is 70 percent of their orders are coming through the web, not from the web. Perhaps 15 percent to 20 percent of the orders are coming from the web, but the majority of the orders that came over the web where driven by a print catalog.
Customers and prospects place orders in different ways. For example, some use a toll-free 800 number in order to speak with a "live" person, others place their order on the web after receiving a catalog in the mail, and still others order through the mail (5 percent or less). The older the customer, the more they tend to order by mail or phone. It really doesn't matter which channel the consumer uses as long as they order. It's not the web vs. the catalog or the catalog vs. the web; it's all about getting the order.
All catalogers want to mail smarter. I'm sure that's your goal too. You want to mail less, drive more business to the web and increase profitability. Something you might consider is segmenting your one-time-only web buyers from your one-time-only catalog buyers instead of combining them into one RFM group. I often suggest segmenting the 0-12 month, one-time-only web buyers from the 0-12 month, one-time-only catalog buyers.
The catalog buyers always perform significantly better. Oftentimes, web-only buyers tend to be "item buyers." They search the web for a particular item, they find it and make the purchase with no intention of buying from that company again. Catalog buyers tend to be "shoppers." They enjoy looking at every page in the catalog and their frequency of purchases is greater.
In conclusion, here are a few of the reasons why the print catalog is important to the success of your overall business:
- Prospecting: Catalogs reach proven mail order buyers, who are loyal and responsive and like to shop by catalog. It's prospecting with a rifle vs. a shotgun.
- Housefile retention: Regular catalog mailings to your housefile helps to retain customers long term.
- Reactivation: Catalogs are used effectively to reactivate lapsed buyers who haven't purchased for 36 months or more.
- Lifetime value (LTV): Catalogs extend the LTV of the customer.
- Email addresses: Mailing catalogs helps build your database of email addresses.
- Catalogs drive demand!
Steve Lett graduated from Indiana University in 1970 and immediately began his 50-year career in Direct Marketing; mainly catalogs.
Steve spent the first 25 years of his career in executive level positions at both consumer and business-to-business companies. The next 25 years have been with Lett Direct, Inc., the company Steve founded in early 1995. Lett Direct, Inc., is a catalog and internet consulting firm specializing in circulation planning, plan execution, analysis and digital marketing (Google Premier Partner).
Steve has served on the Ethics Committee of the Direct Marketing Association (DMA) and on a number of company boards, both public and private. He served on the Board of the ACMA. He has been the subject of two Harvard Business School case studies. He is the author of a book, Strategic Catalog Marketing. Steve is a past Chairman of both the Catalog Council and Business Mail Council of the DMA. He spent a few years teaching Direct Marketing at Indiana University in Bloomington, Indiana.
You can contact Steve at email@example.com.