Why the Disconnect Between Catalog Marketers and Web Managers?

BY: JIM COOGAN

There seems to be a disconnect between traditional catalog circulation managers and web marketers. Multichannel merchants need to understand the gap between the two disciplines to maximize the potential of traditional catalogs and of the web.

Catalog marketers seem to understand the web and virtually all catalogs have integrated the web into their businesses. Catalogers like the web because it is an additional order channel; now you can call, click or mail in your order. The web is actually a cheaper order channel than taking a phone call. Catalogers get a fresh flow of web buyers over and above the web orders that were generated from mailing catalogs. And there is nothing a catalog circulation manager likes more than a fresh, steady flow of new buyers! For catalogs the web has been a plus both as an order channel and as a whole new world of potential customers. No catalog ever unplugs their web site.

But pure web merchants have not been so quick or nimble at integrating traditional catalogs into their marketing mix. Why not? There are a number of reasons:

1. Publishing catalogs requires some skill sets that pure web merchants do not learn as they launch and build web businesses. Renting mailing lists, running merge-purges, buying printing and analyzing mailing results are skills that are typically acquired on the job and not easily learned in the abstract. Without these esoteric skill sets, publishing a catalog is frankly a mystery to managers who have only lived in the web world. Printing and paper are expensive above the line marketing costs. Web managers are used to some fixed costs of web development but are reluctant to embrace the baked-in marketing costs of catalog publishing. Why should I accept the 10% to 25% marketing costs of cataloging if I can continue to grow my web business with some fixed web costs but very small variable marketing cost?


2. Pure web merchants have a mixed record of success and failure when launching catalogs. Sometimes they don’t do it correctly and sometimes their base of web buyers just isn’t responsive to a snail mail catalog.


3. Some pure web businesses simply don’t translate into mail order catalogs. The categories can be too broad (books, CDs, DVDs.) Some categories can be too narrow like a pure web business with only a single product. Some can be targeted at demographic groups that don’t respond well to catalogs like “tweeners.”


4. How should pure web merchants approach launching a catalog? There are some basic guidelines for success that have evolved:

* Start your planning with your current buyers. Will your buyers respond to a catalog? If your buyers won’t respond to catalogs, then the chance you can use a catalog to prospect for fresh buyers using outside rented lists is slim to none.

* Segment your buyers into traditional RFM (recency, frequency and monetary) segments and test how your very best buyers respond and how your older marginal buyers respond. Determine how much hidden profitable sales you can get from your recent buyers and the sales potential of your entire customer file. Know how deeply you can mail into your house file before you fall below breakeven and your circulation is unprofitable. Is the potential list universe of our buyers large enough to translate into economical press runs and to cover the fixed costs of creating a catalog?

* Test some outside rented lists to measure if you can use a catalog to prospect profitably for new customers.

* Measure sales using source codes on the catalogs. Make sure your shopping cart captures as many source codes as possible. Offer a toll free number to place phone orders. Catalog shoppers expect the option of placing a phone order. Even if your web buyers place the great majority of their orders on-line, you’ll still get phone orders when you mail a catalog. Use matchback processing after the mailing to match the mail file and the responders to get a more accurate measurement of the full demand from a catalog mailing.

* Plan on mail your best buyers as often as every six to eight weeks.

* Merchandise and paginate your catalog like a traditional catalog with the best merchandise up front. Use the inside front cover spread, the back cover and the middle spread of the book to feature your best selling items.

* Use your catalog cover and your creative to sell your company and make sure your cover is attractive so customers keep your catalog around. The longer they keep the catalog, the longer they will order.

* Test 4 page, 8 page or 16 page flyers to your very best buyers before you gear up for producing a full length catalog. Test if you get any response to snail mail. Some pure web merchants find they get a better response to e-mail blasts than to flyers and catalogs at a much lower cost. Know the response rates, the incremental sales you’ll receive, the marketing costs and the potential profitability of e-mails compared to postcards and flyers compared to full blown catalogs.

Catalogs are great at getting reorders out of existing buyers. One of the weaknesses of the web is getting the existing buyer file to reorder. The catalog’s strength in getting buyers to order and to serve as a constant reminder of your company (because your catalog is sitting on the coffee table) fills in a major weakness of the web. The web is fantastic at taking orders and harvesting existing demand but not so great at creating demand. This synergy can mean that catalogs can serve to leverage more sales and profits out of many pure web businesses. If your pure web business has potential to sell with catalogs, you can overcome the hurdles of learning the disciplines of marketing with catalogs. You may find a whole new level of sales and profits when you layer a catalog into your marketing mix!