Multichannel Marketing: Tamke Offers Array of Marketing Tips for Rookies

At the recent Young Professional Day hosted by the Direct Marketing Association’s Catalog and Multichannel Council in New York City, former longtime list broker at Mokrynskidirect and current professor of marketing in New York University’s graduate program in direct and interactive marketing Steve Tamke covered a broad array of catalog-related topics. Stressing the most successful direct marketing companies are the ones that use the techniques that set direct marketing apart — taking advantage of interactive one-to-one communication, generating a measurable response, using one or more databases for customer acquisition and retention, and making use of a variety of media — he provided ways to excel in the direct market if you’re just starting out.

1. Understand your target customer. Know who she is, what she likes, where she shops, her age, where she lives, what she reads and, most importantly, what she has bought and whether she shops direct.

2. Measure performance. Gauge the following factors to increase efficiency: response rate (“the bigger the reach, the bigger the opportunity,” Tamke said); average order size (measure of commitment); sales per catalog (measure of efficiency); and cost per new customer (how much can you afford to pay for a new customer).

3. Position your merchandise efficiently. Tamke recommended at least 300 merchandise items per catalog. Non-apparel catalogs, he said, should display four to five items per page; apparel catalogs should show one to three items per page.

4. Establish efficient operating ratios. Successful catalogers operate within the following ratios according to Tamke:

* Gross margin = 50 percent to 55 percent of net sales;

* Returns/cancellations = 4 percent to 6 percent of general merchandise, 25 percent-plus for apparel;

* Design = $1,500-$3,500/page;

* Total cost in mail = 30 percent to 35 percent of net sales;

* Fulfillment = 10 percent to 15 percent of net sales; and

* Fixed overhead = 5 percent to 10 percent of net sales.

5. Grow your customer file. Tamke recommended expanding your lists to include seven- to 12-month buyers; mail omit prior usage (OPU) names in season; selective in-season re-mails on your best lists; and segmentation (RFM, product/gender selects, ZIP code modeling, custom selects where available and seasonality).

6. Manage costs. Keeping costs down allows you to mail more catalogs, Tamke said. Areas to trim costs include design and photography, printing and paper (where you want to bring in your printer as a partner to ensure you’re getting all the postage discounts you’re entitled to); and maximize co-mailing and add-a-name.

7. Integrate all your channels. All of your promotions should be consistent with each other. The keywords used in your search marketing programs should be the keywords used in your catalogs. Your catalog mailing schedule should be aligned with your e-mail promotions.

The main message Tamke stressed to his young audience was to be patient — not all lists work the first time. It may take a number of tries and testing to find the lists that work best for your business.