Fall Circ, Post-Postal Rate Hike

Nov 02, 2007 9:09 PM  By

The May postal rate hike definitely put a crimp in some catalog circulations. Computer Gear, a marketer of computer-themed gifts and accessories, trimmed fall circulation 15% compared to last year.

“We prospect with break-even profitability as our goal,” says Computer Gear vice president of operations Mark Mackaman.

With the increased costs of postage and paper, a few prospect and house list segments that previously broke-even in the past were forecasted to be not profitable, he says, so Computer Gear dropped those segments from fall/holiday mailings.

“For some of these segments, we have done additional modeling in an attempt to make the segments profitable again, and we are testing these remodel changes this fall,” Mackaman says.

Early results indicate that Renton, WA-based Computer Gear’s fall sales are 5% higher than plan. The digest-sized catalog saw a 6% increase in postage overall, Mackaman adds.

Meanwhile, Griot’s Garage, which mails an oversize catalog selling automotive tools, gifts, and accessories for the do-it-yourselfer, got whacked with a 25% increase in postal costs following the May rate hike.

This was a problem, since the company had managed to increase its 12-month buyer file 59% over last year, says circulation manager and database analyst Karen Ambos, and naturally wanted to mail to all these new customers. What to do?

The Tacoma, WA-based cataloger decided to go ahead and mail to all the new buyers on its house file.”We did not back away from that plan in light of the postal increase,” Ambos says. “It did take a chunk out of the bottom line, but sales came through as expected,” she says.”

Though she would not divulge exact sales and circulation information, fall results at Griot’s Garage went according to plan, she says, and better than last year.