How to Manage Customer Touchpoints

A beleaguered catalog industry has begun the painful process of paying the piper for the excesses of the 1990s. Collectively, we woke up in the fourth quarter of 2000 to the first sobering reality check in nearly a decade—namely, slower growth. Today, nothing less than corporate profitability and business survival are at stake.

Another unpleasant jolt to our euphoria arrived earlier this year in the form of an average 17-percent, bulk-rate postage hike. The ink had barely dried when yet another round of postal hikes was announced. Escalating fuel prices ignited a troubling round of rising shipping costs. And mounting paper prices have seriously undermined the other, once stable, mainstay of our now wobbly three-legged stool—that is, paper, postage and shipping.

Adding insult to injury, leading vendors, succumbing to their own survival instincts, are passing rising costs on to customers, who also are retrenching their finances in response to dreary economic news and decreasing financial portfolios.

What Should Catalogers Be Doing Now?

Adjust to the realities of the marketplace by vowing not to do business as usual—a vow that calls for breakthrough solutions.

The typical cataloger’s response has been the following: Try to cut the cost of doing business, perhaps by reducing staff or implementing other cost-saving programs; or attempt to increase circulation, which, perversely, can result in aggravating already-escalating postage and paper costs. One large computer marketer recently sent its multi-page color catalog to a long-dormant customer—in triplicate! Other catalogers have unleashed often ill-advised price reductions or promotions to artificially boost sales at the expense of profits.

In the business-to-business (b-to-b) arena, the stakes and risks are enormous. Marketers of large-ticket items who resort to traditional “band-aid” solutions miss the mark. A faulty database can squander a fortune since the average-sized order potentially could’ve been much larger, and the margin of error could be greatly magnified. Unlike the consumer catalog market, the b-to-b decision-maker typically is in a buying role for only about two years. Traditional, superficial mail verification doesn’t ensure you’ve made contact with the person who makes the decision to buy your products.

Dig deeper and the question arises: How do you measure the correlation between the purchase value and the potential for that customer to buy your product? Do you fully understand your target customers’ behavioral changes and your appropriate response to those changes?

Today, we seek to manage our customer contact points smoothly and professionally to give the account service rep a bird’s-eye view of the target customer’s track record. The question is, how do you know you’re mailing to the right customer? Managing customer relationships begins with talking to the right customers.

Standard data mining can go only so far, because it focuses on data already on file. Often, key data points are missing. Typical circulation models tell you what customer behaviors have occurred and, based on history, what’s likely to happen in the future. But they don’t address why those behaviors occurred, or what is influencing customers’ decisions.

Another critical blind spot is the failure to distinguish between the many communication channels of choice (catalog, Web, e-mail, fax)—a major impediment to profitable catalog marketing. External overlays in the b-to-b catalog industry are limited. In short, you don’t have the whole picture. It takes qualified personal contact to determine change or potential change.

You may need a technology that converts your data into actionable information to increase profit margins, while minimizing investment in media-resource management. Without a finely tuned, accurate database, you’re “dialing for dollars,” a costly mistake in anyone’s book.

Bill Wild is a founder and principal of Catalog Retail Marketing International (CRMI), a full-service customer contact center specializing in the catalog/retail and direct marketing industries. You can reach him via e-mail: bwild@crmi.cc.