This Month at Lenser October/November 2006

Newsletter Archive

PRESIDENT'S CORNER
By John Lenser, President
What is your vision?  Most of you are in the process of laying out your marketing plans for 2007.  You are deciding how many catalogs to mail to your housefile and how many to prospects.  Based on this year’s business performance, financial constraints, and available opportunity, you may take a conservative approach or decide to grow aggressively.

FEATURE ARTICLE
Starting a Print Catalog in the 21st Century
By Geoff Wolf, Partner
About the only thing that has remained the same between the middle of the last century—when the catalog channel began in earnest—and the present day is that we still have kitchen tables to ponder our dreams on.  There are many stories of catalogs that started at the kitchen table and became significant successes.  A “great idea/kitchen table” start-up success would be very difficult to repeat in today’s marketplace.  Whether a catalog start-up is launched from a kitchen table or an existing business platform, certain fundamental elements are critical.  Read on...

CASE STUDY
Advanced Address Hygiene—An Added Lift to Housefile Performance!
By Anna-Lisa Ulbrich, Circulation and Marketing Manager
A standard step in most merge-purge processing jobs is the running of the National Change of Address (NCOA) file against your housefile.  While NCOA is still the best and most reliable method to ensure that your customers will continue to receive your mail pieces as they move from location to location, there are other processes on the market to further enhance deliverability.  Read on...

CIRCULATION TIP
By Jude Hoffner, Director of Circulation, Business to Consumer
Want to know a better way to segment by recency to make your life easier?  There are two compelling reasons to rethink standard segmentation practices.  Read on...

CREATIVE TIP
Science that Sells:  Is Your Designer Chasing Your Customers Away?
By Carol Worthington-Levy, Creative Partner
Leaving your typography decisions to your designer can be like shooting yourself in the foot, unless you’re blessed to have one who understands a little bit about science and a lot about selling.

multichannel TIP
By Michelle Farabaugh, Partner
A customer who purchases from two channels is worth three times as much as a single-channel customer.  A customer who purchases from three channels (catalog, internet, and stores) can yield five to six times the value of a single-channel buyer.  Initiating six important strategies will encourage multichannel behavior while driving overall increased company sales.   Read on...

EMPLOYEE SPOTLIGHT—CORDELIA PIVONKA
Cordelia Pivonka has always been fascinated with the world of marketing industry.  While attending George Washington University,, so she majored in Communication Studies at George Washington University to assist with her aspirations.  Since early 2003, Cordelia has been a part of LENSER’s List Services Department, learning the nuances of direct marketing, the importance of lists, and how these strategies complement our circulation clients.  Read on...

HOLIDAY SALES TUNE-UP FROM MARKETLIVE – a LENSER Affiliate
MarketLive, one of LENSER’s newest affiliates and a leader in e-commerce software solutions, has offered to share these simple, effective tactics to increase your seasonal sales. 

1. Highlight seasonal content, products and categories.  Put the holiday season front and center so shoppers can find, choose and buy gifts easily.
2. Help shoppers count down to the holidays by offering time-tailored promotions/specials.  Offer quick gift finds to customers who are on a shopping deadline.
3. Stress convenience; it tops the list of reasons why people do their holiday shopping online.  Make gift buying online fast and easy to drive holiday sales.
4. Ramp up your email marketing during the Holiday Season.  Serve customers with targeted offers and gift ideas.
5. Offer timely promotions to lure and keep shoppers.  Synch site offers with the holiday sales cycle to give shoppers the right buying incentive.
6. Drive sales with search – onsite and off.  Boost your site’s visibility to targeted niches, and invite action from onsite search results.

“Of course, the success of you holiday season depends on efforts you made all year long.  But by fine-tuning your merchandising and marketing, you’ll serve holiday shoppers better – and ring in the New Year with robust sales.”  Great advice from MarketLive! 

LENSER CLIENT SUMMIT WRAP-UP

“I can't tell you how much I enjoyed the LENSER Summit!  
It was a great opportunity for me to interact with your partners
and other clients and it certainly came at a good time for me.  
As you might expect with everything going on here
 it is easy sometimes to lose focus.  The sessions got me right back on track!”

The 2006 LENSER Client Summit kicked off with a resounding enjoyable evening, with a lovely fiesta dinner bayside at John & Marcia Lenser’s home with well over 100 LENSER clients and guests, supplier sponsors and staff.

Wednesday was a long work day of intensive seminars covering all facets of marketing—multichannel Customer Strategies, Breakthrough Strategies for Successful Internet Marketing, Secret Elements for Strong Creative Integration, Operations—How to Support Company Initiatives, and Bringing It All Together.

“Was worth the price of the visit”
“Powerful presentation”
“The LENSER team is fabulous”

We ended the day boarding the bus to Sausalito to catch the Hornblower Yacht for dinner on San Francisco Bay—and just in time to see the sun sink into the ocean through the beautiful Golden Gate.  The weather was spectacular and there was clear sailing with a warm breeze and bright stars.

Thursday morning started very early with breakfast and LENSER Partner Geoff Wolf’s version of ‘Deal or No Deal’ as an introduction to “Merchandising—The Secrets of Power Negotiating,” presented by John Kinsella and Jackie Daigle, both LENSER affiliates.  Breaking out into roundtable groups, attendees were able to tap into the expertise of not only the LENSER Partners, but our special facilitators as well.

Special thanks go to our sponsors who through their support help us bring this special event to our clients.  Thank you to NextAction, I-Behavior, Abacus, Donnelley Marketing Catalog Division, CompuTech Direct, DMInSite, John Kinsella, Mach2K, Prosodie Interactive, Quad Graphics, and TMS Call Centers

And a special thank you to all of our clients for attending.  As John Lenser always says, “Our client’s success is our success.”  To sum up the Summit, we think Grady Hesters of Audio Editions said it best:

“These days my time is more valuable than money,
and coming to the LENSER Client Conference
was time well-spent.”

To read more about the LENSER Client Summit and to see entertaining pictures of the dinners, event and golf outing, please click here.

PRESIDENT'S CORNER
By John Lenser, President

What is your vision?  Most of you are in the process of laying out your marketing plans for 2007.  You are deciding how many catalogs to mail to your housefile and how many to prospects.  Based on this year’s business performance, financial constraints, and available opportunity, you may take a conservative approach or decide to grow aggressively.

What is very often lacking in these considerations is a long range vision for your business.  Too often we fail to ask ourselves, “Where do I want to be in five years and how am I going to get there?”  Instead, planning is simply done a year at a time.  Decisions relative to financial resources, staffing, and infrastructure are made as a reaction to stress rather than a well thought out plan.

Every business should have a five-year business plan—a road map of where your business will be at the end of each of the next five years.  This should not simply be a notion in your head, but a well thought out written document.  An increasing number of our clients are asking us to help them with the process of creating such a plan.

Typically we begin by working with the owner to bring his personal and business needs in line.  Is the owner looking at some point in the future to sell the business or pass it on to his or her children?  Is there an exit strategy?  What is the appetite for risk?  Or, in corporate situations, what are the expectations of the parent company?

Once these issues are identified, a group process can begin with managers to identify realistic annual goals and objectives for growth.  Along with goals for sales and profits, organizational growth can be mapped to effectively stay ahead of management challenges.  A five-year budget is created that allows for proper financial planning and development of required financial resources.

The advantages of having such a plan in place are many.  Staff can work as a team with a shared vision for the business.  Managers have clear goals for their own performance, which enhances responsibility and accountability.  Resource needs can be anticipated.  In almost all cases, the business becomes more efficient and profitable.

FEATURE ARTICLE
Starting a Print Catalog in the 21st Century
By Geoff Wolf, Partner

About the only thing that has remained the same between the middle of the last century—when the catalog channel began in earnest—and the present day is that we still have kitchen tables to ponder our dreams on.  There are many stories of catalogs that started at the kitchen table and became significant successes.  A “great idea/kitchen table” start-up success would be very difficult to repeat in today’s marketplace.  The combination of increased printing, paper, and fulfillment costs, along with the competitive nature of today’s mailbox, simply make that kind of investment extremely challenging.  Another kind of start-up opportunity that exists today for a print catalog involves the catalog as an additional channel for a business with existing databases from ongoing e-commerce, retail, and even wholesale channels.

The most important fundamental of a catalog start-up is being able to attain a customer database that is large enough to serve as a critical mass for the entire effort.  A business must invest in “buying” these customers if they do not already exist.  Customer acquisition efforts will be a combination of time and money spent to acquire the buyer file, and these repeat buyers are the key to profitability.  This is exactly why a business with an existing buyer file from another channel is positioned extremely favorably to start a catalog.  Furthermore, an existing business already has the merchandise position, business infrastructure, and top management in place.  In the best case scenario, fulfillment capacity may even exist.

The favorable positioning that an existing business brings to a catalog start-up effort makes the print channel an extremely attractive investment.  The other fundamental part of this investment proposition is the marketing reality of the 21st century.  The marketing world is in the throes of its most significant transition in the past 100 years.  Not since Radio Corporation of America invented the broadcast network in the 1920s has marketing seen such a transformation.  The internet is truly redefining mass marketing culture.  Consumers are making their purchasing decisions in a multichannel environment.  This means that buying behavior is being determined by the sum of marketing “touches” across multiple channels.  Those businesses that are not marketing through the catalog channel are losing market share and must consider this investment.

Whether a catalog start-up is launched from a kitchen table or an existing business platform, certain fundamental elements are critical.  The merchandise position still anchors the entire effort.  Once a successful brand is in place, the right combination of a favorable balance between margin and catalog costs must be achieved to allow for monies being left over to contribute to variable fulfillment, overhead, and profit.

One of the advantages of the catalog business is its inherent ability to collect and take advantage of consumer data.  21st century business mathematics enables us to combine customer insights with return on investment analytics.  The result is a proven methodology of testing and profits.  This is one advantage that exists today that was not available to the early kitchen table start-ups.  That said, to truly leverage the database advantage, we must make sure that the proper software is in place when starting up a catalog.  Rather than settling for an existing software solution or purchasing a “non-catalog” package, it is crucial to get the right catalog management software in place at the very beginning.  Experience has taught us that it is more expensive to fix databases than it is to get it right from the beginning.

CASE STUDY
Advanced Address Hygiene—An Added Lift to Housefile Performance!
By Anna-Lisa Ulbrich, Circulation and Marketing Manager

A standard step in most merge-purge processing jobs is the running of the National Change of Address (NCOA) file against your housefile.  While NCOA is still the best and most reliable method to ensure that your customers will continue to receive your mail pieces as they move from location to location, there are other processes on the market to further enhance deliverability.  These proprietary address hygiene techniques can find additional current and accurate addresses that NCOA cannot identify.  In addition, hygiene can be used as a reactivation technique since response rates tend to increase across these segments, especially in certain merchandise categories.

National Change of Address (NCOA)
The NCOA records are compiled of address changes with the United States Postal Service.  It relies on residents to fill out a form and submit to the post office to help ensure their mail will get redirected to their new address on a weekly basis.  As good as NCOA is, it only finds a portion of those who move each year, and has some limitations:

1. Individuals might choose not to submit a change of address form in hopes of cutting down on the deluge of “junk mail” they might have been receiving at their former residence—wiping the address slate clean, so to speak.  However, these folks will likely update all of their crucial bills and bank statements with the respective institutions directly.
   
   
2. The NCOA file is only maintained for a limited amount of time. If changes of address are any older than 48 months, they will not be identified.
   
   
3. There are strict limits on the matching logic used to identify changes of address for NCOA processing.  For example, if you do not have a full first name on an individual move, a match and change cannot be allowed.

Advanced Address Hygiene
At LENSER, we routinely use NCOA as part of the regular merge process.  But we go a step further.  Employing advanced list hygiene products through Right1 at CompuTech or Intellidress at Cognitive Data allows us to find an additional 8% to 15% of movers or address corrections that normal NCOA cannot make.  This advanced technology utilizes proprietary databases to find consumers who may not have recorded a move with the US Postal Service, but will report a change of address with their credit card company or auto insurance provider, for example.  Furthermore, associations are made between current and previous address, real names and nicknames, maiden names and married names, and multiple variations of business names.

Implementation
One of LENSER’s clients, a large high-end women’s apparel catalog, tested the benefits of running this advanced address hygiene against standard NCOA in their Summer 2006 mailing.

In the past, NCOA was always run as part of the standard merge processing, but was never keyed separately in order to read results.  (NOTE: Garden and home décor mailers should always rekey their NCOA changes and track the response separately, regardless of running advanced address hygiene, since these new movers are more likely to be interested in garden and home décor offers.)  During the Summer merge, NCOA buyer matches were keyed separately from Right1 buyer matches in order to test the validity of the processing and the cost effectiveness.

Results
In Figure A below, a total of 29,235 address changes/improvements were found using NCOA while an additional 37,788 address changes/improvements were found using Right1 processing. The rest of the 818,534 housefile names were deemed current.  While quantity isn’t extremely high, Right 1 was able to find 15,210 additional address changes/improvements than NCOA could in the 24-49+ month time period—only 2,778 came from NCOA at the time (though there had been previous changes with updates applied back to the file).

Figure A

Performance
In Figure B below, it is interesting to note the results of the Right1 records.  Beyond the 0-24 month time period, the Right1 names outperformed both the NCOA Buyers and the No Address Change Buyers.  In the 24-48 month time period, Right1 performed 8% better than No Address Change Buyers and 14% better than NCOA buyers.  In the 49+ month time period, Right 1 performed 142% better than No Address Change Buyers.

Figure B

Conclusions
Looking at the above results, several conclusions can be made:

1. What would have happened if we had not run Right1 on the file and had inadvertently mailed the 37,788 catalogs to the wrong or incorrect address?  Some addresses still might have been considered deliverable, or you might be have reached a new prospect by mailing into the old address, but chances are the buyer you once had in your database was lost to you over the years.  By finding them again, and reminding them who you are as a brand, you are in essence reactivating them as a buyer.

2. While there is an additional cost to advanced address hygiene processing, the money saved in postage alone by mailing to the correct address, in addition to the lift in performance, should pay for the job. Since this is an expensive line item on your merge-purge invoice, LENSER generally recommends that this type of processing be run only once or twice a year, depending on the size of the housefile and the frequency of your drops.

3. Without delving too deep into the psychology of the mailorder buyer, one could conclude from the above example that new or recent home owners might not have the disposable income to start spending on high-end women’s apparel so soon after a move.  This could perhaps explain why the 48+ month Right1 buyers performed so well.  Conversely, for our home décor or garden mailer, the 0-12 month buyers routinely outperform all other segments due to the need of product needs relating to a move.

4. Assuming you run NCOA and update your database regularly with the changes, you have a rough idea as to when the NCOA change took place—most likely within the last 1-6 months. Since Right1 is able to find new/improved addresses beyond NCOA, we aren’t sure when the Right1 change took place.  The change (i.e.: the move) could have taken place within the last six months or it could have been 48+ months ago—we truly do not know.  The one thing we do know is that buyers who haven’t purchased in 48+ months do get successfully reactivated using Right1.  One explanation for this success could be that new or recent homeowners might not have the disposable income to start spending on high-end women’s apparel so soon after a move.  Another explanation for this success could be that your competitors might not be running Right1.  Perhaps your catalog is no longer competing for mailbox space with theirs.

CIRCULATION TIP
By Jude Hoffner, Director of Circulation, Business to Consumer

Want to know a better way to segment by recency that makes your life easier?  Most circulation professionals know how important segmenting by recency is, but in our estimation, most are not executing this segmentation in the best way possible.

The next time you update and segment your housefile, label your recency groups with actual dates such as “January 2004 through June 2004” or “October 2005 through December 2005.”  There are two compelling reasons to do this.  First, you’ll simplify quality control.  If a customer last bought in December 2005, she will stay in that recency group until she makes another purchase.  This makes checking counts easy, and spotting any errors in data conversion even easier.

CREATIVE TIP
Science that Sells:  Is Your Designer Chasing Your Customers Away?
By Carol Worthington-Levy, Creative Partner

Leaving your typographic decisions to your designer can be like shooting yourself in the foot, unless you’re blessed to have one who understands a little bit about science and a lot about selling.

Testing, both in the U.S. and overseas, consistently confirms that there are styles of typography that enable your prospect or customer to not only read your sales message more easily, but also to really comprehend its meaning.  Likewise, there are typographic styles that hinder legibility and comprehension and, in some cases, dissuade your customer from even reading your catalog!

One extensive study, by Colin Wheildon of the Australian News Bureau, was recently re-released as the book, Type & Layout, Are You Communicating or Just Making Pretty Shapes?  In it, there are wonderful scientifically tested tidbits such as:

• Setting type in sans serif fonts (such as Helvetica or other type that is missing the “little feet” that you see on Times) will depress legibility and response by as much as 40%.

• Distorting type (making it wider or condensing it, such as the condensed fonts we see in many tightly-set catalogs) reduces readership, legibility, and comprehension by as much as 50%.

• Setting type reversed-out over a photograph will reduce comprehension by up to 90%. In fact, setting it in black OVER a photo will perform almost as badly unless it’s on a very flat, pale section of the photo.

• Setting your type reversed-out of a color will always reduce comprehension and response.  This is especially true of body copy, which should always be a darker color over a lighter background.

Wheildon notes body copy width as another important area of typography.  For example, 38% of his subjects found body copy wider than 60 characters to be hard to read. And another 22% of his subjects said that they would not even bother to try reading type set wider than 60 characters, when shown various examples.

Imagine trying to sell a product in those conditions—where 60% of your valued customers become disinterested in the product because they’re turned off by the typography!  It would be like a salesman speaking gibberish—and customers turning away.

Wheildon also takes on the subject of Reader Gravity, where we learn how the traditional photo-first approach is still the most powerful way to sell a product—and much more.  His statistics are very compelling, and his work has been duplicated independently by Dr. Siegfried Vogele of the Direct Marketing Institute in Germany.  Vogele’s book, The Handbook of Direct Mail, has been translated into dozens of languages and is now an internationally recognized guide to selling by mail.

As one of those lucky enough to have attended his workshop, I found his research to be very much aligned with Wheildon’s with the exception of how to justify copy blocks.  Vogele stresses that flush left, ragged right enables the copy to have no hyphenations and hyphenating words has also proved to be detrimental to comprehension, according to Vogele’s research.

As a final note, I spoke at a conference last year where, upon introducing a few of these facts, I was confronted by a group of skeptics who insisted that this was old-fashioned and probably untrue today—as if human physiology can change over the course of 20 years!

Upon hearing this discourse, another attendee stood up and announced to the entire group that just a few years before, he had handed the book over to his creative department and told them that anyone who did not want to follow these rules would be looking for another job.  The creatives followed Wheildon’s “rules” and he immediately experienced a huge jump in response to his catalog—double digits.

multichannel TIP
By Michelle Farabaugh, Partner

A customer who purchases from two channels is worth three times as much as a single-channel customer.  A customer who purchases from three channels (catalog, internet, and stores) can yield five to six times the value of a single-channel buyer.  Initiating these strategies will encourage multichannel behavior while driving overall increased company sales:

1. Solicit catalog requests on the website.  Website visitors can be some of the most valuable prospects a cataloger can find.  These prospects have brand awareness and an interest in your product offering.  They have further raised their hand—showing their interest in your company—by requesting a catalog.  Most of the time you can successfully mail all your recent internet requests, though you may need to optimize older requesters through cooperative database modeling.
   
   
2. Inkjet store events and the address of the closest store on the back of the catalog.  Leverage the catalog mailings to promote store events as well as letting the consumer know where the closest store is located.  Eighty percent of consumers want to touch and feel a product before making a purchase.  By promoting the stores on the catalog, consumers can find out what’s new and go to the store to purchase that item as well as other incremental impulse items.
   
   
3. Mail deeper into store trade areas.  Use your housefile and specific prospecting models to increase circulation in the store trade area.  By increasing the penetration of these mailings to targeted prospects, not only will the store sales increase, but catalog sales will also increase by about 15%.  It is difficult to measure the impact on store sales.  By analyzing the comparable store sales trends before and after the mailing, however, and comparing them to trends for “holdout” stores, you can conduct an ROI analysis.
   
   
4. Reactivate older buyers through email.  By sending an email to older buyers announcing a new catalog and inquiring if they would like to receive it, you can cost-effectively identify those older buyers most likely to reactivate.  Only about 10% of older buyers will say that they would like to receive the catalog, but that is 10% you were not able to identify before.  In addition, by emailing those names you may pick up some direct internet sales.
   
   
5. Mail gift cards with a catalog and a store location list.  Too many times I simply see a gift card mailed to the recipient in a nice box.  Take this opportunity to also mail a catalog as well as a listing of all the local stores.  This will promote faster sales and higher gift card redemption in all channels.  Also be sure to follow up with subsequent catalog mailings to these gift card recipients, and segment them out to determine their response and seasonality.

EMPLOYEE SPOTLIGHT—CORDELIA PIVONKA

Cordelia Pivonka has always been fascinated with the world of marketing, so she majored in Communication Studies at George Washington University to assist with her aspirations.

Since early 2003, Cordelia has been a part of LENSER’s List Services Department, learning the nuances of direct marketing, the importance of lists, and how these strategies complement our circulation clients.  Cordelia has developed into a seasoned broker who provides insightful recommendations and an unparalleled level of service.  Notes Michelle Houston, Vice President at LENSER, “Since our list services department works hand-in-hand with our circulation department, it is important that Cordelia brings broad knowledge into a decision-making process, and she does this impeccably.”

For Cordelia, LENSER provides a supporting and encouraging environment from both colleagues and superiors alike.  “It's exciting to be a part of an organization that is made up of so many brilliant individuals.  In addition, I take pleasure in working with our clients and learning about each specific business—their challenges and their triumphs—and find helping them in any way I can to be extremely rewarding.” 
  
As growth at LENSER continues to speed along, Cordelia’s ability to think creatively will significantly aid in our clients’ success.

HOLIDAY SALES TUNE-UP FROM MARKETLIVE – a LENSER Affiliate

MarketLive, one of LENSER’s newest affiliates and a leader in e-commerce software solutions, has offered to share these simple, effective tactics to increase your seasonal sales.

1. Highlight seasonal content, products and categories.  Put the holiday season front and center so shoppers can find, choose and buy gifts easily.
2. Help shoppers count down to the holidays by offering time-tailored promotions/specials.  Offer quick gift finds to customers who are on a shopping deadline.
3. Stress convenience; it tops the list of reasons why people do their holiday shopping online.  Make gift buying online fast and easy to drive holiday sales.
4. Ramp up your email marketing during the Holiday Season.  Serve customers with targeted offers and gift ideas.
5. Offer timely promotions to lure and keep shoppers.  Synch site offers with the holiday sales cycle to give shoppers the right buying incentive.
6. Drive sales with search – onsite and off.  Boost your site’s visibility to targeted niches, and invite action from onsite search results.

“Of course, the success of you holiday season depends on efforts you made all year long.  But by fine-tuning your merchandising and marketing, you’ll serve holiday shoppers better – and ring in the New Year with robust sales.”  Great advice from MarketLive!