Yes, your catalogs are doomed – and so are most of mine. They just won’t work in the future. In fact, mail order catalogs as we know them today won’t even survive.
Why? For the 10 reasons I’ve outlined below:
1) Catalog glut. Everybody complains of getting too many catalogs, and many customers just “won’t take it anymore.”
2) Overmailing. Too many catalog marketers think that mailing more catalogs generates more sales, and they never learn the real lessons.
3) The nonexpanding universe of buyers. The same names are being mailed and contacted by most every cataloger. No truly productive breakthrough has been found to increase the number of potential catalog buyers.
4) E-commerce and the Internet. It’s impossible to exist today without hearing predictions that electronic commerce will dominate the future. Some industry wat chers predict e-commerce will destroy “big box” retailers, while others are sure it’s the end of paper catalogs. I’m not smart enough to know how true either will be, but the Web will certainly have an impact on those marketers that do not provide real value for customers or earn their loyalty.
5) Discount retailing. Customers have so many choices enabling them to buy most any product at discount prices that catalogs often end up being the higher-priced option, rather than the best deal, as in the early days of mail order.
6) “Me toos.” Someone develops a good new idea, and everyone copies it. The industry has spawned so many “me too” catalogs that unique ideas hardly exist anymore.
7) Poor service. Too many catalogers do not focus on customer service, and as a result, they fail to impress customers. Really bad service harms everyone in the catalog industry, because the turned-off mail order buyers will probably not buy by mail from anyone ever again.
8) Rising postal costs without rising service. Postage continues to go up without the Postal Service providing additional services.
9) Rising production costs. While technology has helped improve efficiency, the cost of producing catalogs nonetheless continues to rise. And rising catalog costs coupled with squeezed margins limit profitability and future investment.
10) No real benefits for catalog buyers. Compared to the vast number of competing options, catalogers really provide few benefits to customers. Getting business means earning it for good solid reasons, and there just aren’t many companies out there doing this anymore.
Even catalog financials don’t make sense much of the time. Pure prospecting usually delivers less than 1% response. This means that more than 99% of a catalog mailing is wasted and winds up in the garbage! Mailings to actual customers may get response rates of 5%-15%, but even then, how can 85% waste be tolerated in the future, with greater competition and increased shareholder demands?
Our financial model must be reversed: Our response rates need to be 85%! This is the real future of tomorrow’s catalog marketing. To continue with the horrible waste of money, resources, and the environment that’s taking place today is just nuts – and it won’t get you where you need to be.
So what hope is there? Well, if today’s catalogs are doomed, then tomorrow’s catalogs must be different.
Here is what I think tomorrow’s catalogs will need for any of us to survive in the marketplace:
1) One-to-one marketing. Our catalogs cannot be generic “one size fits all” editions that we hope offers some merchandise that the masses will buy. Instead, we must think of one customer at a time and focus on how to satisfy what that customer wants.
2) Virtually unique catalogs for each customer. In business-to-business, there is a tremendous variation in what most loyal customers buy. For instance, most of our customers have only one brand of copier and one brand of laser printer – yet our catalogs sell pages and pages of items for alternate brands. The catalog mailed to that customer should contain products only for that customer’s machines, with all of the related supplies and tips on how to get better productivity and longer life from their equipment.
3) The right products offered at the right price and the right time. We need to know what our customers really want and what price points will trigger their response. The creative and merchandising focus should be on what the customers want to buy, not necessarily on what we want to sell to them. We should know their ordering cycles and help prevent our customers from running out of consumable products they need, which causes emergency calls, rush deliveries, and higher costs for everyone.
4) Real benefits that are available only through our catalog. We need to identify the unique benefits – proprietary products, exemplary service, speedy delivery – that will earn a customer’s business, even without providing goods at the lowest price. No one can offer the absolute lowest price all the time to every customer and still stay in business.
5) Faster delivery than anyone else. At Viking, we provide same-day delivery to customers in 22 major cities. A small-business customer can order as little as $24 worth of goods and get delivery the same day he or she calls, or the customer can fax or send the order over the Internet without any delivery charge at all. Viking becomes the customer’s stationery storeroom, without any investment on the customer’s part.
6) Fanatical service. Our order-takers and customer service staff must be friendly, helpful, competent, knowledgeable, and above all, compassionate! If they are, it works and comes across to the customer – if they’re not, we’re dead.
7) Instant answers and real help. Customers should never be put on hold, be transferred, or require a call back. We must implement the right technology and systems, and hire people who are capable of really helping customers instantly.
Is all this doable? You bet! Emerging technologies have made possible things that were never imaginable in the history of catalog marketing. At Viking, for instance, we plan to significantly expand our same-day delivery service to many more regions and countries, since our customers in cities that already have same-day service have proved to be our most loyal and profitable.
Unique catalogs targeted to different customer segments are also possible. Viking is now producing four-sided digitally produced cover messages that make sense for each particular recipient. We’ve also found that with data warehouses, we’re mailing less and getting better response, which leads to lower advertising costs, less catalog glut, and higher response rates – and it makes good environmental sense.
Finally, I think the focus has to be on the customers and earning their loyalty, and not on our own selfish needs, including profit and loss.
If we do this right and take good care of our customers, the rest will take care of itself.
We should all work toward converting “doomed” to “in demand!”