Cut Costs and Keep Creative

The clock already may have struck midnight on postal reform, but that doesn’t mean your catalog has to turn back into a pumpkin. There’s no need to strip it down in ways that sabotage branding, creativity and, most importantly, sales. Even within the design and financial confines of today’s postal rates and structure, the dream of an effective, financially viable catalog doesn’t have to be a fairy tale.

Through postal reform the U.S. Postal Service is developing a more accountable rate-making structure, as most catalogers should be aware by now, replacing irregular rate hikes with more predictable and regular adjustments. It’ll take serious housecleaning to find budget relief in the production and design process while working within these new postal rates — but it can be done. Here’s how:

Right Paper, Right Price
Last year not only brought some of the largest postage increases, it also saw dramatic changes in the paper market. Paper is very tight right now, and everyone is feeling similar pressure to cut costs. The winners in the paper game will be those who do the dirty work of finding the best possible paper for the best price — sooner rather than later. Since postage is likely to increase again soon, making smart paper decisions now will pay off down the road.

Typically accounting for more than half of a printed project’s cost, paper is the first area you should examine for budget cutting. The touch, feel and brightness of your paper are significant indicators to customers about the quality of your product and your company, so any changes should be discrete and virtually undetectable.

There are several ways to cut paper costs without a significant drop in quality. One option is to consider imported (European or Asian) papers. These papers do have to clear U.S. customs, so that means crucial planning and timing. Also, the foreign paper market is impacted by the strength of the dollar. Another option is to work with a paper merchant on your particular needs; this especially is helpful in tight markets.

If your catalog weighs more than 3.3 ounces, a goal would be to redirect the per-piece catalog weight back down [or at least closer] to 3.3 ounces. Drop to a lower basis weight, or print on a higher bulk paper option. One way to offset the less substantial feel of a lower basis weight is to print the catalog’s interior pages on the reduced weight and apply a heavier outer wrap. In addition, eliminating the bind-in order form and preparing it within the catalog can shave weight from your mailing.

Change Formats Wisely
Jumping to a dramatically smaller format, such as going from a 83⁄4 inches by 107⁄8 inches trim to a slim jim (tall and narrow format ranging in size up to 61⁄8 inches by 111⁄2 inches) can be a nightmare for your catalog’s branding and product presentation. There is a pre-existing perception that slim jims are downscale. This format provides a different visual landscape than a standard format (approximating a square when open), affording a much smaller space to present products.

So, first consider consumer reaction to the size change. Format changes often result in reduced response rates. Will your customers and prospects still recognize you? Will they stop to open the tabs that hold the catalog shut (and cost you an extra 3 cents per piece)? Would your photos have to be so reduced in size that people can’t shop from them?

Following past postage increases and the most recent one, a number of catalogers have found slim-jim sale and clearance editions a viable alternative to books that previously mailed at full size. Slim jims enable them to put the net savings toward funding the additional postage for their standard-sized books. Slim jims also work well for niche books that emphasize one merchandise category pulled from the main catalog. These get mailed to a select group of customers.

If the lure of approximately 35 percent in postage savings (when mailed at the 5-digit, enhanced presort rate) compels you to make this switch, beware. By mid-2008, the postage loophole, which enables catalogs that conform to the slim-jim size to gain substantial postage savings, may be closing. So if you change formats, your savings may only be for the short term.

A less dramatic format change is to adjust your catalog’s trim size. With co-mailing becoming more of a solution for catalogs, there has been a shift to a standardized size of 8 inches by 10 inches (down from 83⁄8 inches by 101⁄2 inches, a short cutoff size that shifted years ago from the long cutoff size of 83⁄8 inches by 107⁄8 inches). This move can save dollars by using less paper, which results in your catalog weighing less and costing you less in postage. At the same time, it opens the door for co-mailing savings. Best of all, the size difference usually isn’t noticeable.

There’s a downside to any format change, however, in the form of increased creative costs. Revising and resizing means pages need to be redesigned, copy must be cut, and digital mechanicals have to be revised. In some cases, you’ll have to take format-appropriate photography.

Cut Pages Meticulously
The ratio of products to pages is critically important to a catalog’s financial success. But the fit has to be perfect, and you may not be able to force all your products into a smaller book while effectively maintaining your selling space.

The density of your pages is very recognizable to the consumer. So if you reduce your page count and try to cram more items onto the remaining pages, customers probably will react negatively. Likewise, cutting merchandise can sabotage your book’s revenue. Cutting pages and products is like shrinking the size of your physical store, which only means less revenue.

So if you decide to cut either or both of these, test the current page catalog against a reduced page version. Try weaving promotions and copy into the catalog that drive shoppers to your Web site to see your entire assortment.

Cut Postage, Not Circ
There’s no magic wand to help solve all of today’s budgetary issues. So, let your vendors become your catalog’s fairy godmothers of sorts. If you want to mail smarter but not less, then seek help from your printer, list manager and co-op database providers. Even the USPS itself will be happy to consult with you to make sure your pieces comply to yield the maximum postal discounts.

For example, don’t hesitate to incorporate add-a-name, in which you add names to carrier routes that fall short of the 10-per-carrier-route requirement. Increase the number of deliverable addresses in your housefile by running it through the National Change of Address (NCOA) database. Learn about the new flats sequencing system, the automatic high-speed feeders and sorters being implemented by the USPS. Keep your list clean and compliant so it’ll sort for maximum efficiency.

Co-Mailing’s a No-Brainer
Virtually all printers offer some kind of co-mailing opportunities, which involve combining your catalog with other catalogs in either online or offline bindery to get lower postage rates. Co-mailing also allows for deeper penetration into the mail system, with which comes the added benefit of better deliverability. In the end, co-mailing can save an impressive 4 cents or 5 cents per book without forcing you to make any changes in design, size, paper or circulation.

With digital technologies largely handling page composition today, the labor-intensive, cost-heavy aspect of prepress predominantly lies in the digital retouching of photographs, such as creating clipping paths, silhouettes and shadows around product shots. If your catalog requires this work (as most do), it can be an excellent place to save a little money in your budget.

Significant Savings Abroad
Outsourcing these services overseas can beat even the cost of a U.S.-based freelancer by 75 percent. You can offshore such services as color corrections, page composition, etc. Most foreign vendors allow you to post digital files on a secure server. They then send the work back to you electronically so you can print the files out to review or approve on screen. These fast, cheap and high-quality services can have a positive impact on your budget, while also keeping a project moving overnight.

Discover VDP
Profoundly different from personalizing an intro letter or putting messaging under an address line, variable data printing (VDP) is the process of varying text, graphics and photos on each printed impression based on relevant customer information drawn from a database. A powerful one-to-one marketing tool, VDP is emerging as a unique way to tailor the shopping experience to each specific customer, and rising response rates are proving that it’s very effective.

When evaluating complexity vs. value, static mailings (mass market without VDP) typically yield a 5 percent return, while VDP mailings can yield 20 percent or more. The costs associated with VDP are higher, however, so look at your cost per return both with and without VDP. And be ready to commit, because VDP is a continual process that must be constantly adapted based on results.

As rising costs become a way of life, continuing to mail creative and successful catalogs doesn’t have to be a dream. By implementing some of these strategies, your catalog and postal reform can, indeed, live happily ever after.

Dawn Flook is director of production for King of Prussia, Pa.-based Catalogs by Lorél. You can reach her at (610) 337-9133 or dawn@lorel.com.