Online Leads: Quantity or Quality?

Back in the old days, when commerce was spelled without the first “e,” catalogers used traditional marketing efforts to generate catalog requests, including advertisements in magazines, package inserts, co-ops, card decks, list rental, and customer referrals. These methods worked because they used standard direct marketing principles that focused on courting the target audience for that catalog.

Along came the Internet. In its early stages, most catalogers were reluctant to invest in shopping cart technology for their Websites. For the most part, they used their sites to supply information to their audience and to generate catalog requests. Along with using their own Websites, catalogers partnered with sites designed specifically to gather catalog leads, such as Catalog Link, Shop at Home, Catalog Site, and Catalog City.

With low cost-per-inquiry fees of $0.25-$0.50, many marketers decided to offer their catalog on every major catalog-collection Website. The key was to negotiate an affordable fee and to limit the risk during the testing phase by capping the number of inquiries to be delivered, since marketers could not afford to send out thousands of catalogs if they were unsure of how many prospects would convert to buyers.

We soon found out, however, that this method of catalog lead generation was hardly a panacea. Requests started pouring in, yes, but the leads were not necessarily qualified. The collection sites described the catalogs and offered them within the appropriate product categories, so catalogers assumed that the requesters would have an affinity for the products sold and would be more likely to make a purchase. Not so.

In my opinion, two issues undermined the programs. One was the emphasis on “free”; the other was the discrepancy between the immediacy of the request and the time it took to deliver the catalog.

We all know that most catalogers make their catalog available at no charge, requiring prospects only to make a toll-free phone call or send a card back in the mail. In some ways, however, this did act as a qualifier, in that it required some effort on the part of the requester. With catalog request sites, all one had to do was enter name and address information one time in one place, then order as many catalogs as one wanted.

Timing was an even bigger enemy. An online requester who was truly interested in a catalog may have had to wait more than three weeks to receive it, as all requests would have to be collated and sent to the cataloger to be processed. The request then typically went to a lettershop before finally getting into the mail stream.

Making Web requests work for you

Despite these drawbacks, you can use the Web effectively to generate qualified catalog leads.

First, you must decide upon your goals. Are you looking to acquire as many new names as possible, or are you hoping to find the most-qualified names from the channel? The quantity vs. quality decision will determine the level to which you expose your catalog on these sites, as well as on which sites you’ll make your offers. For instance, if you wanted to focus on collecting lots of new names, you might offer the catalog in categories with marginal lifestyle synergies — if your catalog sells food, you would include it in the “food,” “gifts,” “housewares,” “kitchen,” and “seasonal” categories.

If you decide on this route, you’ll need a higher conversion rate than you typically get with your tried-and-true promotions to offset the cost of sending catalogs to those less likely to buy. So make sure that the creative and content of the catalog will generate interest and encourage a purchase. In addition, incentives — with a time limit — are a good bet; these can include free shipping, gift with purchase, discounts on first order, and merchandise certificates good on future purchases.

If you choose the “quality” route, pay a bit more attention to the actual mail piece. Consider a callout on the front cover, such as “Here’s the catalog you requested!” Test alternate catalog delivery methods, such as first class, Priority Mail, or one of the services that delivers catalogs directly to bulk mail centers (BMCs), then finishes with standard delivery. You don’t want interest to wane while the catalog sits in a postal facility.

Once you’ve determined your goals, you need to set up a budget that includes not only the costs associated with acquiring those inquiries, but also production and postage expenses. Don’t neglect to include a line item for sending additional catalogs or promotions. Make sure that the conversion rates you need are attainable — and be diligent about tracking requesters-turned-buyers. These requesters will likely have a different lifetime value from that of other segments of your buyer file; know what it is.

Here are a few more tactics:

  • Use your promotional space wisely, and make sure you present your catalog and its offerings in the truest light. Try to be specific about the types of products you carry; allude to brands and price points.
  • Make sure that it’s not too easy to request catalogs. Review the level of “hoop jumping” that someone has to do to get a copy of your catalog. For example, making them use their own stamp or asking them for some information besides name and address may weed out the browsers from the more qualified leads.
  • Try to get an e-mail address from requesters along with their postal information (even if you have to pay extra). Set up a program whereby you can let them know when to expect the catalog. Also offer a few incentives in these e-mails to try to get a faster conversion or a higher average order.
  • Encourage your new requesters and buyers to pass along the catalog to friends, or ask them to pass their friends’ names to you via phone, postage-paid cards, or the Web. The referral business throws off lots of cash.
  • Monitor how many catalogs you send to the leads you generate online. You may find that you can’t afford to send them as many catalogs as you send leads from other sources.
  • Be promotional. Unless you’re offering a one-of-a-kind product, you can bet that those Internet-savvy prospects are checking around to see which catalog is offering the best “let’s get acquainted” deal. Determining the right promotion level can be difficult, so it’s best to test among the tried and true: free shipping, discounts on a minimum purchase, discounts on the entire order.
  • Set a cap on the number of leads that you will fulfill over a certain period of time. Analyze performance, then decide if you can afford to continue to fulfill these catalog requests.
  • Test, test, test. That goes for the copy, the offer, and the sites you’re using.

Online lead generation has come a long way during the past few years. Most sites now offer you the ability to promote a variety of your products directly to the catalog shopper. This may be a more successful method of name acquisition, skipping the requester phase altogether. Just bear in mind that you’re less likely to generate huge numbers to add to your house file using just this method. Your best bet is to combine the two functions, allowing for alternative methods of getting acquainted.

Finally, work with the account reps from the various lead generation Websites. Rely on their experience to help you leverage your offers on the site. It behooves them to make sure you’re successful. And you can be.

Robin Lebo heads Lebo Direct, a direct marketing and Internet consultancy in Charlottesville, VA.

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