Geoff Wolf, EVP Client Strategy
Two J.Schmid clients recently made dramatic — and successful—changes to their catalog programs. Take a look at these case studies!
Case Study #1
Challenge:
A B2B marketer offering innovative merchandising solutions had a mature catalog program. Management’s goal was to transition marketing dollars to ecommerce and grow catalog sales.
Solution:
J.Schmid recommended a two-pronged approach. First, we conducted a data audit to fully understand the customer and their behavior. Second, we looked for ways to reduce catalog expenses and improve catalog sales.
The audit revealed a fundamental problem in the integrity of the data feeds to the service bureau and cooperative databases. These critical partners were being provided only a subset of the data, and thus both response rates and productivity across all customer segments were misreprented. As a result, some records were being over-mailed while other, more profitable customers, were being ignored. Once corrected data feeds were provided, we conducted a clean response analysis and developed a new, relevant and successful contact strategy. We developed a contact plan that gradually reduced circulation away from the low performers, while also testing new prospecting lists.
To reduce catalog expenses, we recommended working with a supply chain partner to bring down catalog print and paper costs.
Results:
Catalog print costs were reduced by tens of thousands of dollars year over year, and circulation was cut by 14%. And yet, by end of year, sales were up 6.3% in post-attribution catalog dollars.
For this client, these traditional catalog attribution rules have been consistent for many years: if a record was mailed in the season, the address matched the mail file and an order was received within 30 days of the mail date, the sales were attributed to the catalog channel. This traditional model has been challenged for accuracy. But in this case the reported results—along with more cash in the bank—are directional enough to know these changes made a business difference.
Case Study #2
Challenge:
A gardening supplies provider, selling to both businesses and consumers, needed to pull disparate elements of their multichannel marketing program together into a single, comprehensive effort. They asked J.Schmid to serve as a single contact Marketing Director, and to bring a new team to the catalog circulation program. The online responsibilities were also included as we needed to transition catalog dollars to ecommerce investments.
Solution:
As the catalog program has the longest lead time to re-engineer, it was the first order of business. We immediately started a full catalog supply chain review and put the 2018 contracts out to bid. We also leveraged existing data to execute an annual response analysis for the season just ending.
We developed a new attribution process to better understand the online and offline customer behavior, and to deploy a more holistic approach to measuring success. The goal was to drive more orders in total at a commensurate average order value and grow total sales. The catalog program would still be measured with a match back in the traditional way to provide an additional view. At the same time, we brought online data into the process to gain new visibility of the overlap between online and offline sales.
The goal was for each order to contribute to overhead and profit. For the catalog, we eliminated all unprofitable records and gently increased the circulation of the profitable segments. Prospecting experienced the biggest reduction in circulation on the catalog side. Investments in paid search and an Amazon program were added for customer acquisition.
Results:
The supply chain bidding process resulted in a 13% reduction in catalog print and mailing costs, year over year. Circulation quantities were reduced by 18%, further reducing overall costs. On the revenue side, order volume is up 7% overall as of this week with the tail end of the season still to come. For ecommerce marketing, non-brand customer acquisition orders are up 23%. Direct traffic is up 5% and organic traffic is up 10%.
We’d be remiss not to note that this same business is experiencing a decline in average order value across all online and offline media. Sales are closing in on last year’s dollars but still disappointing from a revenue expectation. A discussion around the average value metric is beyond the scope of this blog and is also in play for the current season. Still, the order volume is a clear success given the decrease in program costs.
Every business is different. If you would like to reduce your catalog costs while increasing orders, make Geoff your first phone call!
Tags: catalog, catalog print, Geoff Wolf, increase sales, media, reduce costs