5 Signs Your Brand Might Need a Catalog Audit
Paying for catalog consulting services isn’t merely an expense, it’s an investment. Many brands invest hours designing and creating a great catalog and yet they don’t think to invest the time to craft a strategic catalog circulation plan or segment the list to track results. Instead, the mailing list pull is outsourced to the brand’s IT department, which guesses what parameters to use and then sends the file to the printer.
A catalog audit can help you save money and uncover future revenue opportunities by getting it done right the first time.
Still not sure? Take a look at these five key signs that a catalog audit is the right move for you and your business.
Sign #1: You aren’t certain how your efforts are doing
Your IT department pulls a list of recent buyers and sends this through to the printer for dedupe and mail. This is great, but you are not quite sure who is included in this list and you have no way to track the results.
Things seem to be going well, but without the proper metrics in place, how can you be sure? You consider a few options, including coupon codes to help you gain better insight into the results, but you suspect there is a better way to measure catalog performance. After some deliberation, you decide not to bother. Your revenue is doing well, so you must be doing something right. You opt to focus on optimizing your digital customer acquisition strategy rather than focusing on direct mail.
What’s the problem here?
Although the revenue is telling you that things are going well, you are effectively in the dark as to what exactly is going on. You’re not sure which segments are responsible for the strong marketing performance, and whether they might be concealing weaknesses in other areas.
Sign #2: You don’t know how to improve your strategy
The last few quarters have been very soft and your CMO is starting to ask some serious questions about your catalog strategy. A number of questions are raised: Should we be mailing fewer catalogs? What is the optimal catalog frequency? Should we start using catalogs for prospecting? Do we mail catalogs to Amazon buyers?
This is good — this is healthy for the future of your strategy, so what’s the issue? The issue is that you can’t answer these questions because you have no metrics to draw upon.
Panic sets in. You could run a response report, but the mailing list is not segmented or coded based on RFM and you would not be able to derive any insights from the catalog mailing. You desperately get in touch with the IT department, asking them about the criteria used for the last mail file they created. One week later, you receive their response: They don’t know because the request is not stored as a saved job. Instead, the mailing list request ticket gets sent to a different programmer each time, who then writes a query to pull the file. Now what?
What’s the problem here?
When things are going well, you can essentially ride the good times. When things start going bad, however, you suddenly have no way to arrest the downturn.
Sign #3: You trust your mail shop with mailing list hygiene
You don’t really give much thought to mailing list hygiene, and instead, you trust your mail shop to do the right thing. But, did you know that the mail shop only processes NCOA customer moves from the last 18 months and doesn’t use the full 48-month NCOA database? Yikes! By not asking the right questions, not only are you missing out on updating a bunch of customers’ moves, your reactivation campaign just became a little less profitable.
What’s the problem here?
Efficiency is key to getting the best out of direct marketing. Any potential customers you miss, or who you target in the wrong way, represent lost revenue. It’s important to set list priorities, understand merge logic, and communicate with your mail shop about your list processing requirements.
Sign #4: You overestimate the value of your marketing lists
You use brokers to acquire the most effective lists for your direct mail strategy. One list, in particular, seems to be perfect for your brand. This is a list of high school-age girls who are interested in varsity sports; the ideal match for your upcoming tennis campaign.
So, in Q1 you invest $20,000 in a catalog prospecting test, hoping to secure big profits. However, you have no way to know exactly how much profit the list is generating. Before you repeat the test in Q3 as planned, you decide to open a strategic review of your direct mail program.
The review revealed the list to be a bust. The $20K investment resulted in just $6K in sales and a $17K loss (after deducting CGS). The only plus side is that you caught this failure before you repeated it in Q3.
What’s the problem?
Unless you are effectively tracking metrics on your lists, any investment figure you attach is simply arbitrary. You do not know how much profit the list represents, and therefore you cannot know how much you should be investing. Happily, this is an area in which a catalog audit will pay for itself, delivering key insights to move the needle on customer acquisition and actionable catalog circulation planning guidance for future catalog mailings.
Sign #5: You are experiencing declining results across all channels
Sales are flat or declining in every channel but it’s hard to pinpoint the exact reasons. You made some budget cuts to digital acquisition and to catalog circulation and suspect this might have contributed to the sales downturn. The problem is, without proper metrics in place across all channels, you cannot know what action – or combination of actions – to take.
What’s the problem?
None of your marketing initiatives exist in isolation. Each is a key component of a broader sales and acquisition eco-system. This means, neglecting to track metrics in one area can have a negative effect across the board.
The Catalog Audit Solution
Catalog audits are thorough reviews of your catalog program, designed to expose inefficiencies or weaknesses and highlight the missed opportunities. Our team will analyze customer metrics and review all the steps taken in the process of creating a mailing list. We examine everything from annual circulation plans and response reports, to test set-up & execution and strategy. In addition, we take your top 2 or 3 concerns and include our findings in the audit.
Even if direct mail generates less than 20% of overall sales, our strategic catalog audit always includes a Customer Insight Analysis (CIA) Report that helps brands understand why business might be slowing down (or where the growth in sales is coming from).
The CIA report is a deep-dive based on six key customer segments – covering acquisition, inactive or loyal segments, and more – and provides actionable metrics and trends to help you optimize your business. The report provides insight on sales (all channels, not just catalog) by customer segment and makes it very easy to calculate the lifetime value (LTV) of newly acquired customers.
Our catalog audit insights help brands understand which segments are driving sales. Most of our catalog audits are easily paid for by the cost savings we uncover!
What Happens After the Catalog Audit?
After the catalog audit, we can support your direct mail program by functioning as your in-house catalog circulation team. We can plan and execute your direct mail campaigns and ensure your brand has a solid circulation strategy for future growth.
Interested in learning more? Contact our team today to schedule a catalog audit.