Boost Your Revenue per Catalog Mailed

As a cataloger, no doubt you always want to increase the amount of revenue per catalog (RPC) mailed to your housefile and to outside prospects.

As you boost circulation, your RPC will decrease since catalogs are being sent to lower-performing names, generally to prospects. So a general caveat: The more you mail, the less RPC you’ll achieve.

Increasing RPC most often will result in increasing your bottom line. So if you grow by increasing circulation, how can you maintain or increase the RPC?

This month I offer 10 proven ways to increase your RPC.

1. Add pages.

By adding pages to your catalog, you leverage postage costs and increase the RPC. This assumes, of course, that you have enough quality merchandise available to support the additional square inches of selling space.

When direct-selling costs increase, there’s a tendency for catalogers to reduce page counts. But that makes it even more difficult to absorb various cost increases. Boosting your page count will help you dilute those cost increases, and your RPC will rise.

Rule of thumb: Your RPC will increase by one-half the percentage increase in page count. For example, if your page count increases 20 percent, your RPC should increase by about 10 percent.

This assumes, of course, that your page density remains the same and that product offerings increase accordingly. Increasing pages is one of the few real bargains afforded catalogers today.

2. Eliminate marginal names.

Your incremental break-even point* is and will continue to be higher. Therefore, marginal buyer names and outside prospect names should be eliminated.

Let’s assume your incremental break-even point is $1.25 per catalog mailed. Eliminating marginal names and/or not mailing to outside lists performing at less than the incremental break-even point will increase your RPC. Don’t reduce the amount of prospecting too much, or you could be limiting the growth rate of your housefile.

3. Re-mail new buyers fast.

Remember, recency of purchase is the No. 1 determining factor when it comes to repeat purchases. There’s no need to wait for your next regular catalog mailing cycle to convert new, one-time buyers into multiple buyers.

No doubt you’re aware of the potential of contacting new-to-file buyers soon after their initial purchases. Set up a daily or weekly program (depending on volume) to download these hot names for mailing to a letter shop or outside inquiry-fulfillment service. They’ll treat these proven-buyer names with the same importance and priority they give traditional inquiries.

4. Pack a catalog and other promotional inserts with every outgoing order.

This sounds basic, and it is. But I’m continually surprised by how often it’s not done. This is a must, and it’s so easy to do.

I’m often asked, “Why should I do this if the customer just ordered?” Recency of purchase is the most important criterion in circulation planning. So putting catalogs in the hands of recent buyers will increase the odds of them buying again, especially if they’re pleased with the orders. (Or they may give the extra catalogs to friends.)

Packing other promotional inserts (featuring, for example, sale items, new items and overstocks), also can add revenue to increase your overall RPC. The chart, “Revenue Per Catalog Mailed” provides actual results you can expect from packing a catalog with every outgoing order. It also shows the relationship to bounce-back catalogs vs. mailings to your housefile vs. mailings to prospects.

5. Use housefile modeling for specific applications to improve your RPC.

But understand this isn’t a substitute for recency, frequency and monetary value (RFM) analysis.

One way to use housefile modeling effectively is to model all the previous buyer names you don’t plan to mail, plus your non-converting inquiries. Using modeling to reactivate your housefile will help you identify those previous customers most likely to purchase again.

The same is true of using modeling to identify which of your inquiries are most likely to buy.

In both cases, you’ll increase your RPC by eliminating circulation to non-performing names before you even mail them.

After you’ve mailed to your non-converting inquiries for the last time (generally three times), have these prospect names modeled and mail them one more time. You’ll be pleased with the results when you see the increase in your RPC.

6. Try to squeeze in one additional mailing to your housefile during your busy season.

Let’s assume you mail to your housefile once per month. Let’s also assume the December holiday is your best season.

During the months of September, October and November, consider mailing three weeks apart vs. four weeks, so you can mail one additional time to your housefile. This additional drop should perform at 70 percent of a regular housefile mailing to similar RFM segments of your customer list.

I’ve also seen companies mail to the best segments of their housefiles in early December as a last-minute-ideas mailing. Because the gift-giving season is shifting to later in the month, later mailings work; buyers apparently have confidence in the catalog industry’s ability to fulfill on time.

Rule of thumb: It’s very difficult to over-mail your housefile.

7. Try promotional offers.

Offers such as free freight, a dollar amount off an order and other ordering incentives can motivate prospects to buy and help increase your RPC. Note that free shipping has become by far the No. 1 offer.

Indeed, shown in the chart “Promotional Offers”

are the results of a recent test Lett Direct did that looked at free shipping vs. control (no offer). As you can see, the free-shipping offer increased the RPC by 30 percent, results that are consistent with other tests.

8. Use title slug mailings.

Business-to-business mailers: Use your housefile as a prospect file to increase RPC. Simply remove the name of your customer and replace it with a function title, such as president or purchasing manager.

In addition to mailing a catalog to your customer, mail the same catalog to someone else within the same company and at the same address. There’s no cost for the name, and results you achieve most likely will fall somewhere between your housefile results and mailings to outside rented names. This should be a win-win for you, and it’ll increase your RPC.

Following is an example of how title slugs generally are used in business mailings:

Mailing by name of individual:

Mr. Stephen Lett

President

Lett Direct Inc.

Title slug with individual name removed:

Marketing Director

Lett Direct Inc.

9. Optimize rental singles.

This method is used post-merge to identify and suppress the rental singles (one-time buyers).

After the merge, you can optimize the rental singles and suppress the worst-scoring 10 percent to 20 percent. This method should yield a 5-percent to 15-percent (or more) lift. (Mail a 5,000 to 10,000 back-test cell to monitor the suppression results in order to measure the exact lift you get.)

10. Mail your merge/purge hits to older buyers.

This is a reactivation technique that may yield higher RPC. These are hits between the rented lists you use and your inactive buyers.

Stephen R. Lett is president of Lett Direct, a catalog consulting firm specializing in circulation planning, forecasting and analysis. He spent the first 25 years of his career with leading catalog companies, both business-to-business and consumer. He can be reached at (302) 541-0608, or visit the Web site: www.lettdirect.com.