The New Era of Catalog Circulation Planning

The New Era of Catalog Circulation Planning

Issue: 

2010, December

The economic crisis played havoc with catalog response rates over the last two years. Response rates for mailings have been pretty stable over time and don’t vary much from mailing to mailing. But the upheaval in the economy caused response rates to fluctuate wildly, and mailers have found it very difficult to predict mail response with any accuracy.

Now the economy has reset. What does that mean for direct marketing response rates?

  • The good news is that rates are stable again, so mailers can plan future mailings based on their most recent results.
  • The bad news is that response rates have typically reset at lower rates, so mailers have cut volume because they have less circulation that will respond above breakeven.

So what should mailers do to reset their circulation plans?

Given that response rates have reset, your most recent data is your most reliable. Be very careful about looking back to the same mailing last year or even looking at response data from six months ago. Don’t assume that the mailings you are planning now will do better than your most recent mailings.

Mailers changed lots of elements of their marketing programs to survive the downturn. Review the competition to make certain that they haven’t substantially sweetened their offers compared to yours.

Look for pockets of poor responding circulation to suppress. Mailers are segmenting the “sand states” of Arizona, California, Nevada and Florida because housing there is so far from recovery. The cooperative databases can optimize your mail files and find households that have simply stopped responding. Mailers are segmenting multi-buyers and singles and finding suppression opportunities.

Ask your broker what other mailers are doing and planning in your competitive space.

Know how your competitors have shifted over to web marketing and e-mail. Response rates to traditional mailings may be down permanently for some mailers because of the web. On the other hand, if your competitors have shifted spending to the web you may have less competition for your traditional mailings.

Finally, don’t let all the good news in the media about improved consumer confidence and increased spending levels drive you to build up your circulation before you have actual in-the-mail results that give you the confidence to increase circulation.

Jim Coogan is president of Catalog Marketing Economics and specializes in catalog circulation planning and negotiating printing for catalogers. Reach him at jcoogan@earthlink.net.

Author: 

Jim Coogan