This Month at Lenser |
 Newsletter Archive |
PRESIDENT'S CORNER
Don’t Underestimate the Power of Your Catalog
By John Lenser, President
As we all know, existing catalog companies have benefited greatly from e-commerce. They were well-positioned to take advantage of the internet as a source of new customers and as an efficient means of receiving orders.
We have come a long way in understanding the interaction between a mailed catalog and a website. Nevertheless, in just the past few months LENSER has undertaken studies for several companies where there has been a vast overestimation of orders originating on the web versus from the catalog. In one case we were called in due to a perception that catalog sales were suffering, when in fact the opposite was true. Learn more...
FEATURE ARTICLE
A Baker’s Dozen of Creative Ways to Make Your Catalog More Responsive
By Carol Worthington-Levy, Creative Partner
It is said that enough drops of water can become a river. This holds true in your catalog effort, too. Every little step you take to make your catalog more successful will add up. With perseverance, great products, and the following tips, you can create your own river of sales. Learn more...
CASE STUDY
Lifetime Value Deconstructed
By Todd Miller, Director of Circulation, Business-to-Business Markets
Last year, LENSER and one of its clients began a long-term project concerning the cost of customer acquisition and the subsequent lifetime value of those customers. Learn how to deconstruct the information and create your own lifetime value study. Learn more...
CIRCULATION TIP
By Anna-Lisa Ulbrich, Circulation and Marketing Manager
Are you a seasonal mailer? Do you think your male buyers might perform differently from your female buyers at different times of the year? In addition to standard RFM segmentation, we suggest segmenting your housefile by gender, especially for highly seasonal and niche mailers. Learn more...
multichannel TIP
Take the Matchback to the Next Level: Track Order Channels, Too!
By Jude Hoffner, Director of Circulation, Business-to-Consumer Markets
You’ve heard us preach the importance of matching orders back to your catalog mail files to understand the true value of your catalog marketing channel. We know that a significant percentage of sales is driven by the catalog to other channels, such as retail stores and internet sites, and we need to understand the catalog’s role in doing this. But is there any more information to extract out of those matched orders, and what about the orders that don’t match? Learn more...
CLIENT HIGHLIGHT—REJUVENATION
Junk Store Becomes Rejuvenation, the Nation's Premier Manufacturer of Period Lighting and House Parts
If you want to know what’s so great about period-authentic fixtures, ask Jim Kelly, owner and founder of Rejuvenation. Says Kelly, “When I opened Rejuvenation, my life and my dreams didn't go far beyond digging around in grimy places saving old doors and door knobs from the dump.” So began Kelly’s twenty-nine year love affair with antique lighting, period hardware and old houses. Learn more...
EMPLOYEE SPOTLIGHT—TRISH IRIBARNE
Trish Iribarne, attracted to LENSER by its full service commitment, came to work for LENSER in 2004 and has never looked back. Read more...
AFFILIATE FOCUS—RIMM-KAUFMAN GROUP
Searching for search marketing help? Looking to grow your web sales and profits? Are you wondering if outsourcing paid keyword searches is the right decision for your company? Paid keyword search programs often reach a scale and a complexity beyond what is reasonable to do in-house. LENSER believes that the Rimm-Kaufman Group’s bid technology is among the strongest in the industry. Learn more...
NEWS BRIEF
-
Going to the Mail Order Gardening Conference? We are. If you would like an opportunity to meet with us to discuss your catalog needs, please contact Michele Salmon (michele.salmon@lenser.com) to set up an appointment.
-
This month we welcome Discount Dance Supply, JumpUSA, Utrecht Art Supplies and The Y Catalog to our family of clients.
-
LENSER is happy to announce the recent promotions of Todd Miller, Travis Seaton and Jude Hoffner.
Todd Miller has been promoted to Director of Circulation, Business-to-Business Markets, and is overseeing and managing this newest consulting division. Business-to-business is a more layered and nuanced practice than business-to-consumer. We are keenly aware of just how complex, fragmented, and dynamic this marketplace is and Todd is well-positioned to help these clients grow and strategize for optimal ROI.
Travis Seaton has been promoted to Director of Circulation, Specialty Groups. He is responsible for our larger clients and those with needs outside the normal purview. Travis brings a high level of expertise and insight in areas critical to the success of these unique clients.
LENSER’s business-to-consumer department continues to grow and Jude Hoffner’s recent promotion to Director of Circulation, Business-to-Consumer Markets, will facilitate this continued trend. Jude is positioned to solidify LENSER’s reputation as the premier outsourced provider of quality circulation and marketing management.
Congratulations to all three!
PRESIDENT'S CORNER
Don’t Underestimate the Power of Your Catalog
By John Lenser, President
As we all know, existing catalog companies have benefited greatly from e-commerce. They were well-positioned to take advantage of the internet as a source of new customers and as an efficient means of receiving orders.
We have come a long way in understanding the interaction between a mailed catalog and a website. Nevertheless, in just the past few months, LENSER has undertaken studies for several companies where there has been a vast overestimation of orders originating on the web versus from the catalog. In one case we were called in due to a perception that catalog sales were suffering, when in fact the opposite was true.
Most of us have adopted matchbacks as a method of properly attributing orders back to a recent catalog mailing. We forget that in the “old days,” when matchbacks were used to validate the results of collected keycodes, only about 70% of orders ever matched mail tapes. This was due to match logic, pass along catalogs, or “whatever.” We knew that the missing 30% had to come from the catalog—there was no internet—but could not fully explain how. Unfortunately, today we are all too willing to attribute these orders to internet marketing.
If you examine the keyword searches that result in customers coming to your website, you will find that frequently the name of your company accounts for over half. I suggest that most of those who arrived via your catalog name did so as the result of a catalog mailing or as the result of years of brand development in the marketplace resulting from catalog mailings. In fact, when we track the curve of these clicks, we find that it very often matches the catalog response curve.
In our studies, we have been unnerved by the attribution of orders to emails that in reality should have been attributed to the catalog. In one case, all the orders from those sent an email were attributed to the email for several days, even though that period was square on top of the peak catalog response period.
Unfortunately, this misattribution of orders frequently results in bad marketing decisions. More marketing dollars are provided for web marketing and catalog prospecting is reduced or even eliminated. At LENSER, in analyzing our clients’ mailing results, we are not only doing matchbacks and factoring their results with keycode results, we are also looking carefully at orders that remain unable to be attributed—the “whatever” orders. Don’t assume that they result from your e-commerce program without a close examination of the underlying dynamics. For more information, be sure to read Jude Hoffner’s multichannel Tip, Take the Matchback to the Next Level, in this month’s newsletter.
FEATURE ARTICLE
A Baker’s Dozen of Creative Ways to Make Your Catalog More Responsive
By Carol Worthington-Levy, Creative Partner
It is said that enough drops of water can become a river. This holds true in your catalog effort, too. Every little step you take to make your catalog more successful will add up. With perseverance, great products, and the following tips, you can create your own a river of sales.
-
Add copy to your covers. Testing proves time and again that a catalog cover with copy outperforms one without. This makes sense. The most newsworthy things get our attention most quickly. Notice the newsstands near the grocery checkout and you can see that they’ve figured out how to get someone to take a look! Even with a photo of a popular celebrity, a plain cover is just not enough.
-
Make a list of your core competencies and your unique selling propositions. Often catalogs are so merchandise-focused that they can’t separate themselves from the pack. People need clues to what makes you special. Have people from all your departments, from your sales team to your production artists; make a list of at least five things that make your company’s offer special.
-
Make the back of your catalog work harder. Got one product for sale on the back cover? Try two or three! Got any teasers into key spots inside the catalog? If not, it’s time you did! Got different price points and categories of products on the back cover? If not, you’re not telling the whole story. Your back cover has to tell a more complete story and work even harder than the front cover.
-
Think of your catalog as a “Paper Salesman”™—it represents all the best of who you are to your prospects. Every product in your catalog deserves its day in the sun—if you don’t feel it’s worth it to make a 100% sales effort for a product, then that product is wasting space in your book. Don’t fall for “it’s there because it just has to be there” especially if it’s a poor performer. Put those products on your website where space is cheap.
-
Paginate for sales, not for merchandising. I’ve seen some extraordinary leaps in response when a book is repaginated. Create smart, marketing-driven pagination that is reflective of your customer base and who you are marketing to—and who YOU are.
-
Make it easy to find things in your book. I hear a million reasons why catalogs don’t have tables of contents, and none of them are in the customer’s best interest. A table of contents does not need to take up much room, but it’s one of the most commented-on and called-upon features in your entire catalog!
-
Make it easy to read your book. Teeny little reversed-out type might please a twenty-something graphic designer, but to anyone with money, it’s a total turnoff. You can’t make someone read something that they are physically uncomfortable reading.
-
Add an offer to your catalog. If you read last month’s creative tip, you know that a good offer can be used to get customers moving right NOW to order. You can set up your offer so that people won’t “expect it” every time, and you can do it without it costing a lot of money.
-
Consider how the human brain is wired. Reader eye flow gravity is an extremely powerful way to choreograph your customer’s movements across a spread, picking up items for their shopping cart. This kind of thoughtful and strategic thinking is well worth the extra bit of time it takes to get it right.
-
Use a designer who embraces response and makes it a priority. Probably only one out of 100 designers knows about reader eye flow gravity or comprehension through proper use of typography and color. And the great majority of them simply don’t care. Well, it’s not their money being spent to mail the catalog—it’s yours. And it certainly is your problem if your income and your job are depending on this being a successful mailing. How do you find out if a designer is an advocate for your success? Ask them how past work was done. Ask them for response numbers—not just “it did well” or “customers/the client loved it.” These are mealy-mouthed phrases for “I don’t know and I didn’t ask.”
-
Use a real copywriter who loves to SELL. A great copywriter knows that selling is their business, and they write copy to sell your product, not just describe it. They ask you for unique selling propositions and they want to see, touch and try the product so they can understand why someone would want it. They don’t rely solely on product sheets to get their information. In tests, I’ve seen great copy alone increase sales by hundreds of thousands of dollars.
-
Wondering if your catalog will do better with a change in creative? Test it! Testing does not have to cost a fortune and if done properly and scientifically, it will prove itself a valued ally in the drive for better response.
-
Can’t afford to test it? Research it! For a smaller budget, it’s possible to utilize e-research (not focus groups and certainly not ‘grandmother research’) to figure out what rings the bells of your housefile customer and your prospect.
If you’re looking for ways to incorporate any of the ideas I’ve presented here into your own catalog, give me a call at 408-269-6871 and we can discuss what’s worked for you and what’s not working. Together we can determine a course of action to get a river of sales flowing in your door!
CASE STUDY
Lifetime Value Deconstructed
By Todd Miller, Director of Circulation, Business-to-Business Markets
Last year, LENSER and one of its clients began a long-term project concerning the cost of customer acquisition and the subsequent lifetime value of those customers. The client provided a transaction level file containing the following data elements:
- Customer Number
- Customer Date of Origin
- Customer Original Source
- Order Date
- Gross Sales
- Returns
- Cost of Goods
Gross Sales, Returns and Cost of Goods, it should be noted, were further segmented into three product categories:
- >Product Category A (accessories for items in Product Categories B and T)
- >Product Category B (hobby ‘B’)
- >Product Category T (hobby ‘T’)
Results
The focus of our reported results is on the lifetime value of customers, excluding all marketing costs. Typically, lifetime value analyses look at either 12-month or 24-month time increments. Not only have we done both, but we have included data tracking the 24-month lifetime value after a customer’s initial purchase. We regularly refer to “gross margin contributions,” which are gross sales minus cost of goods and returns.
Steady improvements in gross margin contributions can be credited not only to improved sales and marketing, but also to decreases in returns and the all-important cost of goods. Between 2000 and 2004, return rates dropped approximately 1.5% (from 5.8% to 4.3%), while cost of goods dropped a staggering 6.2% (from 57.5% to 51.3%).
Detailed below are three major conclusions that have significantly altered our marketing approach in 2006.
-
The second 12-month (i.e. 13–24 month) gross margin contributions of customers originating in November and especially December are less than the average of all other months combined.
Customers acquired in the months of November and December are plentiful and are major contributors to the annual bottom line. Many originating in the holidays, however, are gift purchasers, not hobbyists. By isolating customers originating in these months who do not purchase from Product Category A (accessories for items in specific hobby category) but rather come in, buy from a hobby Product Category B or T as a gift, then never come back, we can change our marketing strategy towards them. Reducing catalog mailings and/or providing greater incentive for making a second purchase to these customers will be a high priority in 2006.
-
The 24-month post-initial gross margin contributions of customers with MAG as an original source are significantly higher than all other original sources (LIST, CUS, WEB, OTH and UNK).
Clearly, the advertising we do in several key magazines is beneficial. The subscriber base of these periodicals consists largely of hobbyists, precisely the audience to whom we want to mail our offer.
-
The 24-month post-initial purchase gross margin contributions of customers whose initial purchase includes items from Product Category A are significantly higher than those whose initial purchase includes items from Product Category T.
It can be safely assumed that customers initially purchasing from Product Category A already own an item from Product Category T, indicating a more avid interest in the hobby. Certainly, the same cannot be said of customers initially purchasing only from Product Categories B or T. Also, the broad assortment of Product Category A (accessories for items found in Product Categories B and T) that the mailer offers is unparalleled in their marketplace. Customer continuity can largely be attributed to this fact.
Conclusion
The information gathered in this ongoing study is presently being applied to all facets of marketing in the hopes of increasing sales, EBIT, and buyer file counts while lowering departmental costs as a percentage of overall sales:
-
Larger annual outlays for print advertising in key hobbyist periodicals
-
Continued catalog circulation efficiency via improved customer segmentation
-
Development of test offers and/or contact strategies geared toward converting non-accessory and gift purchasers into repeat customers
CIRCULATION TIP
By Anna-Lisa Ulbrich, Circulation and Marketing Manager
Are you a seasonal mailer? Do you think your male buyers might perform differently from your female buyers at different times of the year? In addition to standard RFM segmentation, we suggest segmenting your housefile by gender, especially for highly seasonal and niche mailers.
LENSER tested this strategy with a sports merchandise mailer, a predominately fourth-quarter mailer with many gift buyers. We asked the service bureau to segment the housefile according to gender throughout the year and found that when mailing close to equal quantities of male-identified buyers and female-identified buyers, the female buyers indexed 23-28% better than the male buyers during the Fall and Holiday seasons. However, these results reversed in non-holiday seasons when male buyers indexed 13-38% better than female buyers.
What does this mean for overall circulation strategies? With the mailer above, during the 4th quarter, we decided to mail female buyers very deep into their RFM, making sure they received every catalog. During quarters 1-3, though, we made sure to mail male buyers deep and often and to hold back many female segments—perhaps only mailing to them once per season.
This strategy is an easy way to increase results in peak seasons and mail more efficiently in non-peak seasons.
multichannel TIP
Take the Matchback to the Next Level: Track Order Channels, Too!
By Jude Hoffner, Director of Circulation, Business-to-Consumer Markets
You’ve heard us preach the importance of matching orders back to your catalog mail files to understand the true value of your catalog marketing channel. We know that a significant percentage of sales is driven by the catalog to other channels such as retail stores and internet sites, and we need to understand the catalog’s role in doing this. Matchbacks provide that understanding. But is there any more information to extract out of those matched orders, and what about the orders that don’t match?
For several reasons, I strongly recommend including order channel on the transactional data you process and report on in the matchback. First, by tracking the channel that “received” an order credited to your catalog, you may find that certain groups of customers behave quite differently from others. For instance, a new customer may be more likely to place that first order over the phone, unsure of the level of service or security of transaction he can expect. Or, if you offer a wide choice in price point, those purchasing a high ticket item may want the assurance of person-to-person service, and your phone operators should be specifically trained to provide it.
Second, if you isolate your non-matching orders by channel, you can analyze the truly web-generated sales versus sales that are ostensibly coming from pass-alongs or other miscellaneous marketing efforts. Finance will appreciate the detail for the P & L, and your marketing team will have another arrow in the quiver for budget and sales planning.
Don’t be satisfied merely with allocating orders to a catalog drop or drops to evaluate circulation. Dig deeper into your treasure trove of data and use the matchback to shed light on your entire multichannel enterprise.
CLIENT HIGHLIGHT—REJUVENATION
Junk Store Becomes Rejuvenation, the Nation's Premier Manufacturer of Period Lighting and House Parts
If you want to know what’s so great about period-authentic fixtures, ask Jim Kelly, owner and founder of Rejuvenation. Says Kelly, “When I opened Rejuvenation, my life and my dreams didn't go far beyond digging around in grimy places saving old doors and door knobs from the dump.” So began Kelly’s twenty-nine year love affair with antique lighting, period hardware and old houses.
Although the company has come a long way from its junk store roots, continuing to honor classic designs and craftsmanship has served Rejuvenation well.
Kelly attributes the company's growth in part to what he sees as a fundamental shift in American attitudes about older buildings and homes. "In this country we haven't had much of a tradition of preserving the past," he says. "We always wanted to immediately modernize a home or building that was no longer in vogue. But that's changing, and we're becoming more like many other parts of the world. In Europe, for example, architectural preservation has been part of the fabric of society for centuries."
With this growth in mind, Rejuvenation joined the LENSER family of clients in 2002, having selected LENSER because of its reputation. “LENSER is a diverse company interested in growing our direct business,” notes Alysa Rose, general manager at Rejuvenation. “Working with LENSER provides us the equivalent of in-house expertise (cream of the crop talent) in direct marketing strategy and circulation planning—something we couldn't afford to hire internally,” she adds.
Through this partnership, according to Bill Nicolai, the managing partner overseeing this account, LENSER has laid out a five point plan for growth. Bill notes, “These improvements have increased growth, and the company is expanding to fulfill its marketing opportunities with a wider base of customers. As a result of these changes, Rejuvenation is now well along in the process of developing a coordinated three channel approach to its business for unlimited growth.”
Now brought to you via internet, catalog, and retail stores in Seattle, WA and Portland, OR Rejuvenation features carefully crafted custom products that are built to last. These fixtures are “aesthetically identical” to those of yesteryear. If ever in need of classic fixtures with a sophisticated feel, look no further.
Please visit their website at www.rejuvenation.com.
EMPLOYEE SPOTLIGHT—TRISH IRIBARNE
Trish Iribarne, attracted to LENSER by its full service commitment, came to work for LENSER in 2004 and has never looked back. Says Trish, “One of the first things that attracted me to LENSER was the fact that LENSER is a full service agency with a wide breadth of clients. I didn’t want to work for a one niche company and LENSER just felt right. It had all the elements that I was searching for in a company.”
During the past two years, Trish has been LENSER’S Account Manager for over 40 list management clients. She is responsible for overseeing the sales and operational activities for various lists and alternative media accounts and managing the ongoing quality control of lists and the list fulfillment process, as well as developing and maintaining strong, supportive relationships with list owners. Michelle Houston, Vice President of LENSER comments, ”Trish views and manages her department as an important tool that enhances the total scope of the LENSER organization. She approaches this from a team perspective, bringing together individuals involved in list management, list brokerage, and circulation for collective brainstorming.”
For the long-term, Trish finds the possibilities at LENSER to be endless. “LENSER encourages, rather than discourages, employees to grow and learn new skill sets everyday. Each person has so much to offer and everyone’s background is so unique that there is a wealth of information right at my fingertips.”
On the weekends, you can find Trish spending her time with her husband of nine years and doting on their four-year old daughter. “Family is very important to us, “notes Trish. “We have started our own family traditions, one of which includes a week in Lake Tahoe during the summer and winter. We also enjoy walks to the park and visits to the local library.” To learn more about Trish, please visit her bio.
AFFILIATE FOCUS—RIMM-KAUFMAN GROUP
Searching for search marketing help? Looking to grow your web sales and profits? Are you wondering if outsourcing paid keyword searches is the right decision for your company? Paid keyword search programs often reach a scale and complexity beyond what is reasonable to do in-house. Here are some guidelines to help you determine if you have reached that point. If one or more of the following is true, outsourcing could make sense for your company:
- Your monthly paid keyword search advertising expense exceeds $10,000; or
- Your term list exceeds 2,000 terms; or
- You are in a highly competitive market with a high average cost-per-click; or
- Your staff spends more than 20 hours a week managing your programs; or
- You change ad copy frequently with more than 20% changing each month; or
- Your term list changes frequently with more than 20% changing quarterly; or
- You wish to run head-to-head tests of copy or landing pages monthly; or
- You are frustrated with your in-house reporting system, as reports take great effort to build, or are insufficiently accurate, or insufficiently informative; or
- You are frustrated with in-house systems for determining appropriate bids; or
- You are frustrated with in-house systems that don’t change bids frequently, either daily or more often; or, most importantly
- Your in-house staff lacks the time, expertise, technology, or interest in managing paid keyword search in-house.
When you reach the point where you’re ready to outsource your paid keyword search program, LENSER highly recommends that you give the Rimm-Kaufman Group a call.
LENSER believes that the Rimm-Kaufman Group’s bid technology is among the strongest in the industry. Alan Rimm-Kaufman, founder and CTO, holds a doctorate in operations research and applied statistics from MIT. During his five-year tenure as VPM for Crutchfield, revenues grew 48% to $192 million, and internet revenues grew over 450% to $80 million in 2002. Crutchfield earned "best of the web" commendations with the search engine marketing program Rimm-Kaufman established.
The Rimm-Kaufman Group’s current algorithm reflects over six years of experience building software to manage complex multi-million dollar paid search campaigns. Despite the power of their outstanding technology, RKG believes that people play a critical role in the process and no “robot” can trump the insight of smart merchants and marketers. As we do at LENSER, the Rimm-Kaufman Group believes retailing is fundamentally about relationships and, as a result, they have built a sophisticated technology with tools designed to accept marketing insights from both clients and staff.
So, you are looking to grow your web sales and profits? To learn more about the Rimm-Kaufman Group and exactly how they can help your company succeed with paid keyword search, please click here.
-
Going to the Mail Order Gardening Conference? We are. If you would like an opportunity to meet with us to discuss your catalog needs, please contact Michele Salmon (michele.salmon@lenser.com) to set up an appointment.
-
This month we welcome Discount Dance Supply, JumpUSA, Utrecht Art Supplies and The Y Catalog to our family of clients.
-
LENSER is happy to announce the recent promotions of Todd Miller, Travis Seaton and Jude Hoffner.
Todd Miller has been promoted to Director of Circulation, Business-to-Business Markets, and is overseeing and managing this newest consulting division. Business-to-business is a more layered and nuanced practice than business-to-consumer. We are keenly aware of just how complex, fragmented, and dynamic this marketplace is and Todd is well-positioned to help these clients grow and strategize for optimal ROI.
Travis Seaton has been promoted to Director of Circulation, Specialty Groups. He is responsible for our larger clients and those with needs outside the normal purview. Travis brings a high level of expertise and insight in areas critical to the success of these unique clients.
LENSER’s business-to-consumer department continues to grow and Jude Hoffner’s recent promotion to Director of Circulation, Business-to-Consumer Markets, will facilitate this continued trend. Jude is positioned to solidify LENSER’s reputation as the premier outsourced provider of quality circulation and marketing management.
Congratulations to all three!
