Personalized, Targeted E-mail Catalogs - (1,209 words)

Dream or Reality?

By Jack Schmid

Imagine a perfect world of marketing where a cataloger could deliver an electronic catalog to prospects within hours of the receipt of catalog requests. Or an electronic catalog that could be added to the circulation mix several times a year for customers, one that could be personalized and targeted to what the customer had previously purchased.

While this may sound like a futuristic pipe dream, a number of breakthrough electronic techniques are within reach of catalogers today.

There is not a cataloger out there that is not concerned about new-customer acquisition costs and finding ways to add additional promotions for existing customers. Perhaps this article will give you some "food for thought" on ways to actively bring the Internet into your circulation planning in the coming year.

Some of the major players in e-mail cataloging and marketing are Yesmail, LifeMinders, MyPoints, Net Creations, Digital Impact, ClickAction, Responsys and E.piphany.

Shop2U.com is another company that helps catalogers deliver an electronic catalog to prospects and customers via e-mail. With its services, an electronic catalog can be personalized for the customer to present targeted product offers based on past customer purchase activity.

If you have a minimum of 30,000 opt-in e-mail customer addresses and can pay a $5,000 set-up fee, Shop2U.com will use your customer list and detailed product transaction history to build a statistical model of the products that each customer will likely be attracted to and ultimately buy. It then tailors an electronic offering of products most likely to be associated with past purchase activity—in effect, a targeted product offering to customers. Furthermore, every e-mail catalog communication can be personalized to customers by name. Rather than sending every product in every product category to every customer hoping to find something that may catch their eye, the e-mailed mini-catalog contains 12 to 20 of the items (or up to several hundred items, if you desire) most related to the customer's last or most recent purchase. By the way, Shop2U.com also takes a percent of net sales on the back end.

For prospecting, a personalized e-mail catalog can be sent to new catalog requests, especially those coming from the Internet. The offer could be your top 15 or 20 items that typically appeal to and are purchased by first-time buyers. You could also rent e-mail lists and test the concept.

Shop2U.com has about 40 clients with whom it is currently working and testing. Some notable players: The Company Store, Balducci's, Domestications, Improvements, Omaha Steaks, Panache, Swiss Colony, Chef's Catalog and Everything Wireless.

Shop2U.com typically recommends sending a qualifying e-mail message, similar to the one at right, to customers a few days before the electronic mini-catalog is transmitted via e-mail. This is a smart idea and gives customers the option of opting out before the e-mail is sent.

Can't We Do This Ourselves?

The answer for most catalogers is "absolutely." But think about the information-systems capability within your company and the ability to test this breakthrough concept in a month's time. Large catalogers can and should devote some serious computer technology and skills to making a concept like this happen. Medium-size catalogs and smaller catalog companies always seem to have a dearth of information-systems staff to tackle new initiatives such as this. My answer is simple—for a modest investment, and minimal time, you can test this concept with one of the companies mentioned above, and determine whether an electronic catalog (big or small) can be part of your circulation plans for the coming year.

Check out the Web site of each of the e-mail and electronic cataloging companies mentioned earlier or visit them at one of the catalog or direct marketing conferences held throughout the year. They will likely be eager to talk with you and explain how and why their services are different from the others. Are they cost effective? Can they produce quickly and allow you to test? How are their services unique?

How Do I Start Sending E-mail Messages?

Whichever of the e-mail providers you work with, it is critical for smart catalogers (big and small) to be able to add e-mail communications to their prospect and customer contact strategies. Here are four steps you need to take to get ready for e-communication with your customers:

1. Develop an opt-in capture strategy.

The DMA recommendations are pretty clear when it comes to sending electronic messages or promotions to customers or prospects. You must have an "opt-in" acknowledgement from recipients before sending any electronic communication.

Most catalogers prefer to have customers give permission for such communication at the time of receiving an Internet order or catalog request. Another time to gather permission is when you acknowledge receipt of an order. Simply asking customers for their e-mail address is not enough. You must have their permission to send them information about specials, new products or in effect, any promotional effort.

Most catalogs are very sophisticated at capturing source codes from mail, phone and fax, but the Internet is another matter. Tracking Internet order source codes is not a high priority nor is it being given much attention by catalogers. Consequently, Internet orders attributed to catalogs are being consistently under-reported and Internet sales over-reported.

2. Make e-mail addresses as important as phone, fax or mailing address in your database.

Historically, catalogers have relied on name and address in their customer communications. Phone number (both daytime and evening) and fax number came next. For business communications, the fax was a very important communications tool—both to and from customers. Today, the e-mail address is a critical database element and permission to contact customers via e-mail is a second element of information to be retained.

Just because a customer has purchased a product from your company does not necessarily mean that they want a long-term, personalized relationship. Some customers want to be left alone. Others will love your e-mail communications and want to receive them regularly. Your database must be the "keeper" of customer information on e-mail matters.

3. Make certain your e-mail address is on every communication from your company.

Every catalog spread, customer message or letter, box shipment, hang-tag, comping bag, etc. must remind customers of how they can reach you on the Internet. You're building a brand and the Web site is an integral part of every cataloger's brand. Another tracking technique is to change your URL slightly, i.e., jschmid.com/offer, to differentiate a special promotion from your regular site.

4. Test different types of promotional efforts and carefully measure results.

Will a mini-catalog work better than a full-blown 36- or 48-page catalog effort on the Web? What about a postcard reminder or special offer? What role does direct marketing play in Internet marketing? The answer is, everything! Measurement, tracking results, testing different offers, calculating cost per order or inquiry, lifetime value and return on investment are all common terms and analytical tools for direct marketers. And these same metrics and more need to be applied to e-mail and Internet promotions. Testing can pay major dividends for traditional catalogers and e-tailers.

Jack Schmid is president of J. Schmid & Associates, a catalog consulting firm in Shawnee Mission, KS. Feel free to tell him about creative innovations you've seen. He can be reached at (913) 385-0220.