Berglund’s Take

As a veteran of the catalog industry, Mrs. Fields Gifts President Greg Berglund has witnessed the ever-changing environment catalogers operate in. He offers opinions on several topics, including where he sees the catalog/multichannel business heading in the near future, as well as tips for those trying to thrive, survive and more.

Catalog Success: What methods of customer acquisition (industry-wide) will be most relevant in the coming years?
Greg Berglund: I’m concerned about the trend in the industry where more and more customers are being acquired using online methods compared to traditional direct marketing methods. The lifetime value of online-acquired people tends to be lower across all businesses I’ve been in — not just this one — and lower than direct marketing-acquired individuals. This is often due to the fact that the switching cost is much lower.

If someone had bought an item from you in the past, for example, now all they have to do is go to Google and put in that class of item, and they can see all of the different places from which they can buy that item in the marketplace. It’s very easy for a customerto move to another retailer.

Generally, I’m concerned about the impact on the loyalty of customers with this ever-increasing shift to online. It underscores the need to be rock-solid on the service you deliver and your product quality. You have to excel on those fronts because it’s much easier for customers to find alternatives.

CS: What advice could you provide on how to run a profitable catalog/multichannel company in 2008 and beyond?
GB: Understand the essence of your brand and why customers care about what you offer — and deliver that. Listen to customers closely. Watch your key-coding and analytics carefully. And while you might love the look and the feel of a certain item, if you’ve tested it and the numbers don’t pan out, move on. The numbers don’t lie.

Breakthrough customer service is going to be more important than ever to retaining customers in 2008. With the continued growth of the Web, it’s easier than ever for customers to shop around. The challenge is how to keep them loyal to your service!

With commodity prices (fuel, paper, labor) on the rise, looking carefully at investments in marginal pages, circulation, online marketing, product development, etc., will be important to maintaining profitability levels.

And finally, build great teams and be their biggest cheerleader! Running an organization today is about servant leadership. Ask yourself: ‘What can I do to help my employees be more successful?’ It’s with their success that the business will thrive. My role is to get the right people around the table, teach and share my experience, give clear direction, provide resources, and most importantly, celebrate their successes with them and the rest of the team.

CS: What role do you see the Internet playing for catalog companies in the future?
GB: There’s a huge world in online marketing that’s still out there, and very few retailers have cracked how to do that very well. Online provides us the opportunity to get to this one-on-one communication with our customers. And many direct marketers are still stuck in segmentation and market-thinking as opposed to directing their efforts specifically at individuals. There’s a lot of opportunity there because the better we all can do that, the more relevant our offers are going to be to those people, and the more responsive they’re going to be.