Six Circulation Tactics to Try

Analyze Your Current — Not Past — Customer Base

You don’t use outdated response data to build your circulation plan. Rather, you use the most current response data available, right? So why do many catalogers depend on studies that are several years old to define their customers?

A comprehensive analysis of your current customers’ job titles and SIC codes for the companies they represent can provide valuable insight. The more you know about your best customers, the more effective you’ll be at reaching others like them.

For example, say you’ve been targeting 25 percent of your circulation to computer analysts; this is based on the people you thought would make the best customers for your products. But a new job-title study reveals that computer analysts make up only 10 percent of your total customer file. That is, computer analysts may have comprised 25 percent of your file a few years ago but not today.

This scenario is relatively common. New test lists, shifts in your merchandise mix or even creative changes can alter your buyer profile over time. Circulation quantities, percentage of prospecting and frequency of merchandise mix adjustments will determine how often you should gather this information. Look at the data again, especially if you’ve recently made any major changes.

Determine Your True Responders

Imagine this scenario: You got an amazing response on a list you tested. The datacard defined the demographic as 70-percent engineering managers, so that must be the audience you captured, right? Not necessarily.

To determine who actually responded, not just who was mailed, compile job titles by source code. This exercise could reveal that although you mailed to a list claiming to be mostly engineering managers, 80 percent of your new customers generated from the list were, say, design engineers.

Knowing who is responding from various lists will allow you to select future lists based on the right audience. For example, instead of searching for additional generic engineering management lists to test, in the above scenario you’d focus your efforts on finding the more specific design engineering lists or selects. The more information you have, the better you’re able to target.

Get the Most Out of Compiled Lists

If responder files for your offering just aren’t available, and you’re already tapping into all of the appropriate lists for trade publications and organizations, you may have to rely on compiled files to continue building your customer base. With compiled lists, counts usually are good, pricing can be low and the number of selects can make targeting fairly precise.

However, 60 percent of b-to-b catalogers already use compiled lists, according to a recent industry benchmark report, so the odds are good that your competition is mailing the same compiled files as you. If there are compiled-list sources you haven’t tested, you may be missing easily accessible prospects who are perfect for your offer.

Not all compilers are considered equal. Two of the largest-volume national compilers for b-to-b lists are InfoUSA and Dun & Bradstreet (D&B). The methods and procedures they use to collect the names they rent are similar, but the data they can provide is quite different.

InfoUSA claims to have more names available than any of its competitors combined and offers phone numbers on 100 percent of its business lists. D&B’s b-to-b compiled files offer many targeted job titles to help you reach a specific person at the company. D&B tends to have more information on larger companies, because it collects credit data and most of that is submitted on larger companies. InfoUSA tends to have more information on smaller companies.

Some compilers specialize in particular markets, such as SK&A, which is known for its expertise in compiled lists of physicians and other healthcare professionals. Some list management companies, such as American List Counsel, also offer proprietary compiled lists.

A good list broker can help you determine which lists may be suited to your target market. Since list brokers are commissioned by the list owners, their recommendations should be based solely on which files will provide the best results for the mailer. Also, list brokers typically can negotiate better rates because of their purchasing power.

Know When It’s Not Right to Test

Good catalogers test, test, test. But sometimes testing may not be the right decision.

First, determine if you have sufficient mail quantities to acquire statistically valid test results. Remember the Rule of 100: Based on the response you consider attainable, can you get at least 100 orders for each test segment? If not, postpone testing until you have enough quantities to generate more meaningful results.

Second, know what you’ll do with the results of the test. Will the data be good to know or essential to know? Will you roll out a list based on the results? Will the added expense of testing pay for itself down the road?

This may not always be easy to determine, but questions like these must be asked and answered honestly before going through with any test. Avoid going through the effort and expense of list and segment testing if it won’t be possible to

do something valuable with the results. Testing is an investment in learning that can provide incredible insight, but a plan must be in place for using the data — no matter what it tells you.

Know When Response Rates Aren’t Enough

Has this ever happened to you? You must cut circulation quantities to match the number of catalogs printed. Last summer, List A pulled a 2.5-percent response rate, and List B pulled a 3-percent rate. Your first instinct is to cut List A. But consider the costs involved in gaining that response. If List A costs only half as much, it may be the clear winner and shouldn’t be cut from the plan.

Too often, catalogers get so focused on response rates they forget about contribution to overhead and profit. Sure, response rates are important, especially when acquiring new customers, but it’s critical that you stay focused on your catalog’s bottom line.

Now Build the Plan

Developing a contact strategy for marketing to customers and prospects provides a blueprint for who you’ll mail or contact, how and when. Whether built for a quarterly or an annual period, a defined contact strategy forces you to identify your segments, define your plan, and set forth a program for customer communications and prospecting campaigns. Make the plan global (e.g., e-mail campaigns, telemarketing efforts, trade shows, postcard and catalog mailings). Take it a step further by forecasting performance of each effort to look at anticipated new-customer acquisitions, sales and so on.

In many ways b-to-b circulation tactics are more art than science, requiring creative thinking. Getting customers with the greatest lifetime value is achieved when you do your homework. Knowing whom to contact, when and how are the keys to a successful list strategy.

Steve Trollinger is senior vice president at J. Schmid & Assoc., a catalog consultancy based in Shawnee Mission, KS. Mindy Allen is a marketing specialist. You can reach them at (913) 236-8988, or by e-mail: stevet@jschmid.com or mindya@jschmid.com.