best book forward

The needs of prospects, who may never have seen your catalog before, differ from those of returning buyers, who already have some relationship with you and know what to expect inside the book. To better appeal to both groups, many mailers (40% of consumer merchants and 33% of business-to-business catalogers, according to Catalog Age’s 2005 Benchmark Report on Marketing) create different catalogs for each.

Getting prospects and requesters to take that initial risk and make a purchase is the hardest part of marketing to them, says John Grieco, who, along with his wife Angela, owns G.W. Little, a catalog selling clothing and accessories for small dogs. To overcome the hesitancy of first-timers, the Thousand Oaks, CA-based company ink-jets a message on the front cover offering new buyers 10% off their order. “It makes them feel special,” he says.

Giving first-time shoppers a discount or another type of promotional offer, such as free shipping, is a great way to overcome their skepticism, says Andrea Syverson, marketing strategist with Black Forest, CO-based marketing consultancy IER Partners. “Customers who have already ordered — even just once — have already had a ‘first date’ with the company,” Syverson says. “Prospects are still in the blind-date phase.”

About eight years ago Lake Forest, IL-based food gifts mailer The Popcorn Factory began including bind-in and blow-in inserts with promotional offers in catalogs sent to prospects, says vice president of marketing Cheryl Zatz. Ink-jetted messages on the cover such as “See insert inside for your special offer” and “Special offer for you: $5 off your order” call attention to the promotions up front, encouraging the weary prospect to open the book. If the company knows ahead of time exactly where in the catalogs the insert will be placed, it will direct consumers to the page. Response rates rose 5%-15% as a result of the inserts, says Zatz.

Producing the inserts, which usually feature images, such as the regular price of a product with a slash mark through it and the special offer price printed underneath it, are not cheap, says Zatz, though she declines to disclose how much the production and insertion of the cards costs the company.

According to Bill Kopp, a sales representative for Cincinnati-based printer Champion Printing, the production cost of such inserts is typically based on the quantity ordered. For 25,000 inserts similar to those used by The Popcorn Factory, the cost would be roughly $0.04 a piece, he says, whereas the cost of producing 500,000 would be closer to $0.01 a piece.

Regardless of how much The Popcorn Factory is paying, Zatz says the boost in prospects’ response makes the inserts worth the price. “Since there’s an expense to doing it, we wanted to see if we could eliminate the insert, but we found that it really helps,” she says. “We’ve been testing it throughout that time, and we’re at a point now where we have enough verification to show us that it does help to keep the insert in.”

It’s a wrap

When tailoring catalogs for prospects, Gary Hennerberg, consultant/creative director of Grapevine, TX-based direct marketing consultancy Hennerberg Group, suggests focusing on how the prospects are similar to your customers. “These people share characteristics with your customer base, an interest or a certain level of taste or quality,” he points out. “There’s an affinity there that you can bring out.”

Hennerberg advises that companies prepare a special outer wrap for prospect catalogs. A 32-page catalog, for instance, might sport an eight-page wrap — four pages in the front of the book and four pages in the back — targeted to prospects. The catalog should include a message from the president or the CEO introducing the brand and its offerings. Moreover, the cover, as well as the opening and closing spreads, should feature products that the prospects have had a strong record of purchasing in the past, based on information taken from a product select when renting names.

Elmsford, NY-based wine accessories cataloger The Wine Enthusiast has taken this approach in reaching out to prospects. “We are aware that our prospects respond differently than our house file buyers, and so we use that understanding in how we tailor the cover and our creative execution,” says senior director of marketing Peilin Corbanese.

In addition to a letter from chairman/founder Adam Strum, the introductory images new shoppers see, on the cover and in the first few and last few pages, are of what Corbanese calls the company’s “most accessible” offerings. The company has found that items such as stemware are the safest choice when reaching out to individuals whose degree of wine enthusiasm is as yet unmeasured.

In contrast, Corbanese says, customers receive catalogs highlighting furnishings for wine cellars, such as the company’s custom-designed redwood wine racks. The only exception to the rule is if the company happens to have information about a group of prospects who purchased a specialty item such as a custom wine rack elsewhere in the past. If a prospect has a history of buying custom wine racks during the holiday season, for instance, he would be sent a catalog with the wine racks featured on the cover or opening spread.

At their request

With catalog requesters, many industry experts believe it’s a good idea to remind them that they did in fact ask for the catalog you’ve sent to their home. Grieco of G.W. Little says that his company places a dot whack on the front of the catalog that says, “Here’s our latest catalog that you’ve requested to receive.” The dot whack also typically offers a coupon code to use for a discount on the first order.

The Popcorn Factory displays a banner across the front of the catalog reminding recipients that they requested the catalog, along with a bind-in letter. “It basically thanks them for requesting the catalog and highlights the merchandise offerings and the strong points of the company,” says Zatz. Besides pointing out the gift options available for a range of holidays and occasions, such as birthdays and events like Mother’s Day and Father’s Day, the bind-ins offer requesters $5 off their first order.

Make new friends, but keep the old

As much as you want to convert prospective buyers, it’s important not to take faithful customers for granted, cautions Grapevine, TX-based consultant Gary Hennerberg. More important than presenting special offers to these individuals, he says, is acknowledging that you know they have purchased from you before and that you are grateful for their business. One way to do this is by ink-jetting personalized messages that include the customer’s name and point out an item that would appeal to the person based on past purchases.

Wine accessories cataloger The Wine Enthusiast is a big proponent of personalization to returning customers, says senior director of marketing Peilin Corbanese. The Elmsford, NY-based company tries to determine and recognize top buyers using a proprietary formula that takes such factors as recency, frequency, and monetary value of purchase (RFM) into consideration.

“With our best buyers we try to do as much personalization as possible,” says Corbanese. “We send them catalogs with additional material and mention them by name.” During the holiday season, for instance, best buyers receive an edition that includes a personalized greeting card. Those who don’t make it onto the company’s best-buyer list are sent catalogs with a dot whack on the front cover and offerings that are tailored based on past purchases but don’t come with a personalized message.

Skokie, IL-based medical chart and models merchant Anatomical Chart Co. reserves three of its nine catalog drops for mailings to its best buyers, as defined by RFM and other factors, says director of sales Julia Stock. The company, which mails more than 2 million 72-page catalogs annually, rewards those on its best-buyer list with free shipping offers.

“It’s our way of saying, ‘Thank you for being a good customer,’” says Stock. “It’s important to reward people who have stayed with you throughout the years.”

Returning customers of Thousand Oaks, CA-based G.W. Little receive a special offer, such as 10% off merchandise in a product category they’ve purchased before or in a related category. The cataloger, which sells apparel and other products for small dogs, tries to design special offers for all return shoppers and tests unique offers to different customer segments as defined by their RFM cell, says president John Grieco.

The same version of the catalog would be mailed to all G.W. Little customers who had purchased similar items at a certain price point, but segmentation would determine which message would be ink-jetted on the book. A targeted offer might, for example, give a discount on dog leads that match a collar the customer recently purchased.

Less is not more

Responding to the varying needs of customers and prospects by tweaking catalogs with special offers and differing outer wraps can be effective. But catalogers should avoid the temptation of sending prospects condensed books offering only best-selling items, says Steve Stuart, managing director of Annapolis, MD-based direct marketing consultancy

Stuart has found through testing that the smaller catalogs don’t seem to catch prospects’ attention as well as their meatier counterparts. “A typical test we structured mailed a 16-page catalog with best-selling items against the standard 48-page book which is expensive for prospecting for smaller catalogers,” he says. “The theory was the lower cost per thousand of 16 pages required only 68% of the response rate of the 48-page catalog to break even, but regrettably, the test yielded 40% of the break-even response rate instead.”

He hypothesizes that prospects have a greater chance of buying from a bigger book because its size encourages them to keep it around longer. “The 48-page catalog has substance,” Stuart says. “Prospects hold it aside for later viewing, which is why response curves are so long. The 16-page catalog has less perceived value and gets discarded faster.”

Cheryl Zatz, vice president of marketing for Lake Forest, IL-based food gifts mailer The Popcorn Factory, says that for companies with small and midsize catalogs — say, those with fewer than 80 pages — taking pages out only results in offering prospects less selection. What’s more, it doesn’t reduce production costs substantially, because of fixed expenses such as make-ready charges, that stay the same regardless of the book’s size.

“For us to do a smaller catalog, we would incur the same fixed expense as a larger catalog with a lower response rate,” notes Zatz. The average Popcorn Factory catalog is 48 pages.

An abbreviated catalog wouldn’t suit the merchandise selection of some companies. Skokie, IL-based Anatomical Chart Co., which sells medical charts and models, says prospects and customers alike need to be able to browse the cataloger’s offerings — approximately 1,000 products — in their entirety.

“All of our customers, be they requesters or general customers, are in the medical or anatomy field,” says director of sales Julia Stock. “They are studying the human body, all of it, so it’s important to have all parts of the body, all categories available. Ours is already sort of a compilation of the best-of for the study of the human body.”

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