Why You Need to Calibrate Your Catalog Marketing Strategy
Marketing without a well-thought-out strategy, be it catalog marketing or otherwise, is just like building a house without a blueprint. It doesn’t necessarily mean that you will never get there, but there will be a lot of wasted time and resources before you do. Equally as important, is for you to remember that no strategy is fool proof, regardless of how much thought and analysis was put into it. There are plenty of variables to take into account and many of them can go unnoticed.
When the situation requires it, adjust your catalog strategy. Customer behavior and buying channels are constantly changing and evolving. If your catalog strategy hasn’t changed in 10 to 15 years, then your business is probably not performing to its potential.
When it comes to catalog or print marketing strategy, the initial investments such as designing, printing, and postage are quite high. Nevertheless, if properly calibrated, catalogs are a great source of revenue and brand awareness. The biggest challenge, however, is to have them reach the right audience and to offer relevant information.
The most common mistake companies make here is to opt for mass mailings in the hopes that some of the catalogs will reach the right hands and generate sales. But while this strategy may work to a certain degree with emails or other forms of digital marketing, direct mail strategies need to be much more precise. You cannot afford to go for a ‘carpet-bombing’ approach.
Know Your Audience – the RFM Analysis
In order to increase the likelihood of sales, you need to know your customers pretty well. Though this may seem like a daunting task, it is easily doable via the RFM Analysis. Customer segmentation, or RFM, allows you to understand their general interests by analyzing certain criteria based on their past purchasing behavior. This technique has been in use for several decades now, being able to deliver, time and time again.
The results this analysis generates, will not only help you deduce who your best customers are, but will also determine what type of products they are most interested in, allowing you, in turn, to design your catalogs in the most efficient way possible. It will also help you predict future trends as well as to formulate future strategies and engage an even larger segment of the population.
As its name would suggest, catalog circulation planning is an important strategy that continuously feeds itself with new and relevant information so as to generate evermore precise results with each passing loop. In short, it can be broken down into five essential steps:
- Evaluating Past Results – This is where the RFM Analysis comes in, helping you determine the overall strengths and weaknesses of your past marketing strategies. Your customer mailing list should be segmented and assigned a key code every time you mail. The mailing list segmentation helps you understand which segments generate the most sales. This data helps you create future circulation plans and project revenue.
- Catalog Versions – RFM segmentation and catalog tests can help you design catalogs that are more efficient and maximize revenue. Setting up test and control groups for specific test purposes, for example, can help you determine optimal page count, catalog cover, catalog format, or offer.
- Top customers might receive more pages than marginal customers.
- Prospects might need a free shipping offer to drive a higher response rate.
- Inactive customers might get a special cover
- Define Objectives – What are your objectives? Do you need every segment to break even? Are you a start-up who needs to invest in customer acquisition to grow its house file rapidly? Do you have a clear understanding of LTV and how much you are willing to invest to acquire a customer? Is your payback one year or two years?
- Develop Catalog Strategies – Here, you will formulate what exact marketing strategies you will employ. Your catalog objectives, customer metrics, and test outcomes will be key components in developing your direct mail strategy.
- Execute Catalog Plan – Finally, when everything is set, execute the catalog plan and await the results. If you tested something, write up the catalog results and key takeaways. Make sure your results include all costs associated with the catalog test. Use all of the insights to tweak the next round of catalog circulation plans. Catalog circulation planning is a constant cycle of refining and adjusting your plans based on trends and test results.
Simply flooding your current and potential customers with catalogs or postcards is a highly inefficient and expensive strategy that rarely, if ever, generates any meaningful results. If you’re not segmenting your mailing list, you are essentially mailing blindly and not learning anything in the process.
But if you execute well-designed catalog tests, segment your file, and take the time to evaluate results, you will learn a tremendous amount about your direct mail campaigns (and how your customers behave). By calibrating your catalog marketing strategy, you can decrease catalog expenses, eliminate unproductive segments, and generate a higher ROI. Then take those savings and invest them in a higher-performing marketing program or even test a new initiative.
We Can Help!
Do you need help managing the complexities of your marketing programs? We are experts in direct mail planning, strategy, and analysis. Our clients consider us an extension of their marketing team. Let us help manage your catalog or postcard campaigns so that you can focus on running your digital programs. Contact us today for a free consultation.