Top management always wants to grow sales without hurting profitability. The most reliable circulation tactic to grow sales and profitability at the same time is to increase the frequency of remailing the best segments of your buyer file. Here’s what you need to consider in planning your buyer remails:
What are the incremental sales you need from each buyer segment being remailed? And how much incremental sales result from mailing a second catalog to a buyer segment over the sales you would have gotten from just mailing a single catalog? Set up a simple test splitting some buyer segments; mail half one catalog and the other half two catalogs. Measure the total sales and profitability from mailing once vs. mailing twice. Pick house file segments that should be close to your assumed breakeven from mailing a second catalog so that you can calibrate how deeply you can remail into your house file.
What sales can you get from a buyer segment if it is not mailed at all. Don’t make the mistake of assuming that all sales from your house file result from mailing a catalog. A surprisingly large amount of sales will come from your buyers even if you don’t mail them any catalogs, so you should have a test design in place to measure the sales coming from segments that don’t receive your catalogs. This prevents you from assuming you should mail your house file all the way down to breakeven. It’s better to plan for high-profit buyer remails than for larger circulation buyer remails. The latter may maximize your sales but pull your profits down. Remember that the most valuable thing about a good buyer remail strategy is that you can use it to increase sales, profits, and your overall profit percentage. Mail too deeply into your house file and you’ll end up increasing sales at the expense of your total profitability or your profit percentage.
Look to remail those segments that are so far above breakeven in terms of sales per book that the issue is not whether the remail will prove profitable but what kind of contact is best. Go after the best customers, and try to understand what kind of contact (catalog, postcard, e-mail, etc.) is best and what message you should be using to keep the contacts from all blending together. Should you send them a promotion, an announcement of new products, a catalog with a simple cover change or a cover wrap, etc?
What catalog format is economical to produce and print?
- Cover changes are acknowledged to be the most economical buyer remails to produce. You pay for a new cover or cover signature, which is the cost of a plate change and the creative for a fresh cover.
- Postcards and other direct mail formats can work if the promotion is a strong incentive.
- E-mails are so inexpensive that they are an easy way to keep in contact with your customers.
When should you put remails into your schedule?
- Test a remail halfway between regularly scheduled mailings.
- If you market to consumers, look for remail opportunities in the fourth quarter, especially right after Thanksgiving when your customers are buying for the holidays.
- Try “buyer only” sales events preseason and postseason.
- Use remails to keep up sales volume in your slow season to help cover your fixed costs and keep your phone center and warehouse busy.
- Look for long gaps between mailings during the year when you can squeak out some incremental sales from your best buyers.
- If you’re a consumer merchant, mail your best buyers right after Christmas.
Can you overmail your buyer file? Watch your results and see if your response weakens. Make sure you don’t bore your customers by simply repeating the same catalog with different covers. Switch up the merchandise offer, the promotions, the formats, and anything else you can do to keep your catalogs fresh.
Remember, the point is to increase your overall profits and your profit percentage and not just your sales, so the minute you see your profit percentage and your profits hitting a plateau, it’s time to reexamine your buyer remail strategy.
Jim Coogan is president of Santa Fe, NM-based Catalog Marketing Economics.