Postal Reform, Shmostal Reform: Beat any postal increase NOW (and look like a hero!)
Regardless of the fact that postal reform is on the verge of being signed into law, we all know one thing. Just like death and taxes, you can always count on postal rates to go up. So whether we get consistent, rate increases that are, alas, consistent with the consumer price index, or a whopper every few years, who cares? Because we always must work to compensate for increases.
The rule of thumb is for every penny your catalog costs go up, you must generate 2 cents per catalog mailed to compensate for it.
That means one of three things needs to happen: Your catalog has to work harder to generate more revenue, you have to drop some marginally performing house file segments or list rentals from your mail plan, or you must reduce your costs and increase your revenue.
For my money, I always choose the lower costs/increase revenue option. There are two ways to accomplish this: negotiation with vendors and strategic planning.
Here is my list of go-to techniques that can make you the rainmaker in your company — or maybe just rain proof your P&L for the future:
1. Gang up on your catalog. Do you have products that remain consistent through a season or a year? Paginate your catalog so that these products fit onto one or more signatures and gang print them for multiple catalogs. Your printer can store the signatures and bind them in as needed. Same goes for printed order forms, if you still use them.
2. Become a wrap artist. In a process similar to gang printing, you can add an 8- or 16-page wrapper to an existing catalog to freshen up the look rather than printing a whole new catalog. If you can plan your season in advance, print the wrap at the same time as your main catalog. That way, you can produce two catalogs at once. For example, if you regularly produce a 48-page catalog, print up an extra 16 pages. This means your print run will contain 64 pages of new material.
3. Perform an encore. Add an extra mailing to your circulation plan. Drop a catalog to your best customers with just a cover change.
4. Out with the old. Sale catalogs at the end of the season are a great way to clear out inventory. Sale catalogs can be done on less expensive paper, with very high product density per page to get the most bang for your buck.
5. Honor the squinch that saved Christmas. Square inch (squinch) analysis can help you get rid of products that are weighting your catalog results down, or better highlight the superstar products in your catalog. Squinch analysis isn’t about reducing costs; it’s about marketing smarter and getting the most revenue out of your catalog mailings. What always surprises me is how many companies don’t perform squinch analysis on their catalogs. The truth is, just like in retail, the real estate an item takes up must be justified. There’s only so much space available in a catalog, so each square inch of that real estate must generate as much revenue as possible.
Note/caveat: Before you attempt to make any changes to your catalog or business model, always test, retest and run the numbers in advance. Don’t make global changes to your catalog or business model without this step. The results can be deadly. Jim’s rule: always split test any new idea — your current catalog (the control) vs. your test (hypothesis) catalog.
Comments? Something I missed that you’ve tried? Disagree with me? Fire off your thoughts below. Look for part two of this three-part how-to guide next Tuesday.
Jim Gilbert is president of Gilbert Direct Marketing and a professor of direct marketing at Miami International University of Art and Design. He can be reached at email@example.com.
Jim Gilbert has been creating direct marketing programs that drive superior ROI for almost 30 years. Fluent in consumer or B-to-B, creative, operations, and analytics, he marries the strategic and tactical sides of direct and social media marketing in a seamless fashion that gets results. He's CEO of a multidiscipline direct marketing agency, Gilbert Direct Marketing, Inc., which focuses on direct mail, catalogs, DRTV, telemarketing, print, alternative direct marketing media and social media marketing. Jim has been involved in start-ups, expansions and turnarounds, and is an expert in helping multichannel marketers get to the "next level." He's a former adjunct professor, teaching direct marketing at Miami International University, and is President of the Board of Directors of the Florida Direct Marketing Association. Jim loves to talk direct marketing, and has done many lectures on direct and social media marketing.