Being a Catalog CEO is Hazardous Duty
It’s fashionable these days for catalog companies to replace their CEOs. No fewer than six major catalogers have done so this year. And there may be plenty of others among smaller companies that can’t easily be tracked. Certainly the job life-expectancy of a CEO is short, but this wholesale change of leadership isn’t usual.
CEOs can be dismissed for a variety of reasons, of course. The most common one is a company’s poor financial performance. While in the past a board of directors may have been more content to ride out a downturn in profitability, these days boards increasingly demand immediate results. Environmental factors certainly set the baseline of performance, but they’re largely outside management’s control. Should the CEO be held accountable for these external influences, too? Must the CEO control all the profit drivers of the business, no matter how external or market determined they are?
For catalog marketers, the external environment is volatile to say the least. Topping the list of concerns are consumer and business spending. Sales growth can mask a multitude of sins elsewhere on income statements. Costs including paper, freight and, to some extent, production all resist traditional management. Postal costs are often believed to be the ultimate “unmanageable external cost.” Beyond shaping circulation policy and changing mail piece design, most catalog executives believe postage is “uncontrollable.” That’s where they’re wrong.
While its impact can only be measured over time and the correct approach can’t be found in any standard purchasing textbook, other mailers have learned they can affect their postal rates through concerted focus and advocacy. These mailers have funded trade associations staffed with knowledgeable postal experts and regularly participate in key postal events to ensure they’re well recognized in the postal community.
They also lobby directly or through their trade association to Congress, helping Congress understand the jobs their industry creates. They carefully cultivate relationships from the start. This helps maintain a sympathetic ear in Washington, where critical decisions are made that impact their industry and companies directly.
With catalog postage costs ranging from 4 percent to 20 percent of revenues, rapid adjustments to postal rates can have a punishing impact on catalog marketers. Eventually the catalog industry will realize it’s the only major player in the postal rate-making game without a horse in the race. Every other major mailer group has a focused advocate lobbying for its interests. As a major trade journal recently remarked, it’s now “every mailing class for itself” in a post-reform environment. Who’s watching out for the estimated 20,000 catalogers who mail nearly 20 billion pieces of mail?
If you’re a top 500 cataloger — more than $50 million in sales — you have a responsibility to work collaboratively with your catalog brethren to address the environmental factors that’ll determine your business’s, and your own, future.
Hamilton Davison is executive director of the American Catalog Mailers Association. He has spent nearly 20 years in postal policy. You can reach him at (401) 529-8183 or hdavison@catalogmailers.org.
Hamilton Davison has been the President & Executive Director of the American Catalog Mailers Association (ACMA) since its founding in April 2007. Prior to this, he consulted for an educational services start-up, created a specialty card and gift retail chain and grew it to more than 150 stores, was CEO of the oldest and third-largest greeting card publisher and manufacturer, and started an oil and gas exploration business. Mr. Davison’s involvement in postal affairs started in 1992 with his service on the Greeting Card Association’s postal affairs committee. He became chair and directed the litigation and witness team charged with protecting the GCA subclass against virtually every other mailer, helping bring his association from its nadir (losing a rate case appeal at the Supreme Court) to an established force in postal policy that was routinely consulted on all important postal policy issues. He championed and sold the Forever Stamp to many including proposing it to the Chairman of the Board of Governors.
