Should You Cut Circulation or Printing Paper and Postage?

With the massive postage increase that took affect this past May, catalogers must decide where to cut their budgets to preserve profitability. Most catalogers contemplate cutting circulation, printing, paper, and postage.

Before you cut circulation, which inevitably reduces sales, consider ways to reduce your production costs. For instance you can lower the page count of your catalog. Cutting the number of pages yields bigger savings than reducing the trim size or the paper weight.

How can examine whether cutting your page count is a viable option? Look at your square-inch report to see if all the items and all the pages are profitable. This will give you the opportunity to test a smaller page count of profitable pages to both your prospects and to your buyer remails.

Catalogers often find that the buyer remail is an easy place to slip in a smaller page count catalog, because buyers have the alternative of going to your full product selection on the Web, or to an earlier catalog. And if your catalog is driven by a sale offer on the front cover, or a deal coupon in the ink jet message, you may get the same response to the smaller remail.

Cutting the page counts requires testing the current page count catalog against a smaller page one. There is a tradeoff of cost reduction vs. including all the merchandise that the catalog merchants want to see in the catalog. But you may be able to actually improve your profitability and have little effect on your top line sales if you introduce a smaller page count catalog. Test and see how many pages you really need to mail to your prospects and to your buyer remails.

Jim Coogan is president of catalog consultancy Catalog Marketing Economics.

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