Articles
Keep Your Focus On the Customer
One of my clients, after commissioning a demographic study of his catalog’s customers, created a life-size cutout of the typical buyer -- a 55-year-old white, suburban, female homeowner -- dubbed it "Elaine" and set it in the middle of the merchants’ offices. "Elaine" had all her characteristics printed on her dress to constantly remind the merchants whom they were serving.
This particular cataloger knows that to succeed in today’s competitive environment, his company needed a strong merchandise focus and a clear vision of its customers. Here’s where niche catalogs have a distinct advantage. Real Goods, for instance, appeals to those concerned with energy conservation; Stateline Tack to owners of horses; West Marine to boat enthusiasts.
But even catalogs that present a broader line of merchandise frequently develop an almost indefinable circumscription to their merchandise and customers, a distinguishable slant or signature. Often this reflects the founder/merchant who applies his or her own tastes and eye to selecting product and, over the years, has attracted a group of customers who share those tastes. Conversely, the industry is rife with sorry tales of catalogs whose owners were replaced by new merchants who failed to perceive the nuances of their customers’ interests.
A new catalog must be able to define its customers, not only to help focus the merchandise but to guide the creative and marketing efforts. If the universe of potential customers is too small, or if, on the other hand, the customer is "everybody," you may be unable to grow your business without investing unacceptable amounts of money and time -- if you can grow it at all.
But a mature catalog has its challenge too; to recognize the continually changing needs of its customers and new marketing opportunities. Merchants can easily lose focus and buy what they think their customer will like or, even worse, what they themselves like. Having an "Elaine" in mind can guide their day-to-day decision-making.
Quantifying the customer
Whether you merchandise an early-stage catalog still defining its customers or a mature catalog meeting customers’ changing needs, you must stay connected to your audience. To do so, establish a formal, ongoing program to gather information about your customers -- not only who they are and how they might be changing, but also what their needs, wants and buying habits are. Here, some traits to consider:
Demographics
While demographic studies of customers frequently confirm what is already intuitively known, they just as frequently hold surprises. After all, few catalogs have a single customer profile. A proper demographic study can identify multiple clusters of customers who may buy different products for somewhat different reasons.For example, a decorative gardening catalog may find a cluster of younger urban customers in need of deck gardening products, even though the "average" customer is 55 years old and suburban and owns his own home. Demographic studies over time can demonstrate important trends in your customer base, which, if not recognized, could result in your merchandising to a shrinking group of buyers.
Psychographics
Demographics are of more interest when combined with psychographics -- lifestyle characteristics such as hobbies, attitudes and social perceptions -- that may shed some light on why customers buy and what they are likely to buy in the future.A recent study for an upscale giftware client, for instance, revealed that its customers were avid readers and frequent travelers; the catalog subsequently introduced several products related to these interests. Service bureaus will match your buyer file to their databases and provide specific information about your customer.
Purchase Behavior
You’d get even better information from studies indicating what other products your customers buy and from whom. Your circulation manager probably has much of this information locked away in his or her office in the form of merge-purge reports. Merge-purge reports show the percentage of your buyer file present on the buyer files of catalogs whose lists you’ve rented.These reports provide limited guidance; you can buy in-depth cross-buying studies from cooperative databases. Such companies will compare your customer file to their databases to reveal the precise purchasing history of your customers from other member catalogs. Further demographic and psychographic enhancements provide a comprehensive picture of your customer.
Purchase Trends
If you analyze sales by product classifications ("John Lenser on Merchandise," March 1996), you can plot classification performance over time. This shows how the interests of your customers are changing, enabling you to project the direction of your merchandising efforts.If possible, categorize your customers into new-to-file buyers and repeat buyers. If you want to attract new customers, you may be more interested in the product categories that newly converted prospects found appealing. But, if you’re trying to stay true to the merchandise direction that has built your best customer file, the behavior of your core customers may indicate the trends to follow.
All of the above information is quantitative and as such frequently challenging to interpret and absorb. Because merchants find it difficult translating columns of numbers in a report into buying decisions, invite whomever has prepared the information to make a presentation to your merchant group and discuss his or her observations.
A Word From Our Customer
But don’t neglect qualitative customer feedback; who’s more qualified to provide insight into your customers than the customers themselves? Here, a few suggestions on how to cull the information:
Focus Groups
I recommend conducting -- or having an outside firm conduct -- two or more customer focus groups at least every two years. Besides providing valuable information regarding marketing issues, customers will share their views on your merchandise assortment, your prices and their future needs. And focus groups enable you to observe reactions to specific product first-hand.Questionnaires
Whether postcards inserted in outbound boxes or more substantial pieces mailed to a random sample of customers, questionnaires should be an ongoing source of information. And you should circulate every comment among your merchant group.While catalogers frequently place postcards in outbound boxes, they often limit themselves to questions about customers’ perceptions of the product they have just received and suggestions for future product. Periodically mailing a professionally prepared, detailed questionnaire can validate demographic and psychographic information from other sources and lets you explore a whole range of opinions regarding product and service. Involve your merchants in the preparation of the questionnaire to make sure that they get the information they need. But always allow customers to express in their own words their likes, dislikes and suggestions.
Open Lines of Communication
Invite your customers to "tell it to the merchants" with a prominent invitation on the order form or page two of every catalog. Provide an e-mail address or an 800 number where they can leave voicemail messages. Make it clear that while not every message will receive a personal response, all are appreciated. Prepare a summary of the messages daily for circulation through the merchant group. In addition, spend an hour every other week in the call center taking a few orders and actually talking with the customers.Whether your information is quantitative or qualitative, use it to keep your merchandise focused and differentiated from the hundreds of other offers that arrive in your customers' mailboxes. The more meaningful your product offering is to your audience, the higher your response rate and your chances of long-term success.
