Making Space Ads Work

Over the years, catalogers have been dependent on rented lists to acquire new buyers and to grow their housefiles. The technique works, but its potential is limited to previous buyers from other catalogs.

There is another cost-effective customer acquisition method to consider: space advertising. With space ads, even fractional page ads, you can tap into new market segments. You’ll increase your prospecting universe by going beyond the typical rented lists of proven mail order buyers.

Making space advertising work is difficult. Ad space is expensive, “catalog corners” don’t always deliver, and black and white ads are often overlooked. While this method of prospecting has changed drastically over the past 10 years, there are still plenty of opportunities to make space advertising work for you.

Sell the Product or Sell the Catalog?

There are two types of space ads: “selling” ads and inquiry-generating ads. A selling ad features one or more items that can be ordered directly. An inquiry ad is designed to generate inquiries for your catalog—commonly called the “two step” approach to customer acquisition.

I believe selling ads have their downside if you have a full line of products to offer for sale. First of all, it’s impossible to select one or two items that are typical of your entire merchandise selection. What’s more, it’s dangerous to advertise only one product, especially where readers represent a wide variety of interests. From my experience, you are much better off using the two-step approach. Broaden the appeal by advertising your catalog in your ads and the inquiries will flow! Product ads are generally more expensive since they require more space than catalog-request ads, which typically can be just one-twelfth to one-sixth of a page in size to be effective.

While product ads can help qualify the leads, they may also reduce the number of inquiries you receive.

The layout is critical to your success. “Free Catalog” should always appear as your headline and the cover of the catalog should be shown (black and white is fine, although some market segments may need color to get noticed). Give the catalog some dimension to make it appear substantial. I also believe catalog ads are more effective when they include a coupon that can be clipped, even if you decide to test the use of an 800 number in your ads. A brief description of the catalog is also important. Mention you guarantee satisfaction, too. And be sure to put a street address in your ad, not a P.O. box number.

Quality, not quantity, is the key when it comes to catalog requests. Catalogers seem to be satisfied knowing they receive a large volume of inquiries to which they can re-mail multiple times. But, this can give one a false sense of security. The origin of the inquiry obviously helps determine the quality of the lead.

For example, inquiry-generating cooperative programs, for which you pay on a “per inquiry” basis, generally generate a significant number of inquiries. However, do the leads from these types of programs convert? How does the quality of leads you receive from a “per inquiry” program compare to leads you can generate on your own? Again, quantity may not necessarily mean quality. One way to improve the performance of these inquiry generating cooperative programs is to charge for your catalog. This is a must! The less you charge ($1.00 for example), the more leads you will receive, which means fewer of them will be worthwhile. What’s more, not all inquiries should be considered the same when it comes to re-mails. Non-converting inquiries are most often mailed based on how recent the inquiries were, i.e., the past three months, four to six months, seven to 12 months or more. You should segment your inquiries into separate groups based on “source” in addition to recency. This will help you better determine how many times you should mail to each group. You should be able to re-mail the non-converted inquiries three to six times. At that point, you may want to consider having these names optimized by a third party. This will help identify the names worth mailing one last time.

Your Clock Is Ticking

Speedy fulfillment is critical to the success of any space ad program. Recently, I requested catalogs from 12 different catalog companies as shown in the chart below. It took from 16 to 36 days for me to receive the catalogs I requested. Amazingly, a month after calling the various 800 numbers, I had received only three of the 12 catalogs I requested. Without a good catalog fulfillment plan in place, your space ad program is of little value. You’ll waste a great deal of money.

We also requested a catalog from these same companies, but this time over the Internet. We had received a catalog from five of the 10 companies we contacted (a far better percentage than we received by telephoning) by March 2. These were the same companies we contacted by phone but using a different name. Interestingly, it took longer for these companies to fulfill a catalog request from the Internet. We even received an e-mail confirmation from one company saying they received our request but the catalog never arrived.

How fast should you fulfill inquiries? As fast as you can! There is a direct relationship between the number of days it takes to fulfill an inquiry and the conversion rate. From my experience, it’s best to fulfill the initial catalog request within 24 to 48 hours. Some catalogers collect inquiries until they have enough to send out at Standard A bulk rate. That’s a big mistake. Inquiries need to be fulfilled daily. Strive to fulfill a large percentage of your inquiries the same day you receive the request. Again, the faster you can fulfill catalog requests, the higher your conversion rate will be.

A few years ago, I tested fulfilling catalog requests via First Class mail vs. bulk rate. I found that the conversion rate increased by 20 percent to 30 percent with First Class fulfillment! That was more than enough to justify the additional cost for postage. While you may or may not experience the same rate of increase, you will improve your conversion rate if you can fulfill catalog requests faster.

We are a society bent on instant gratification. We order an item from a catalog today and we expect it tomorrow (or within a few days, anyway). Fulfilling inquiries quickly is essential to a successful space ad campaign. There are companies that specialize in fulfilling catalog requests for catalog companies, which you might want to consider. Too many times, the fulfillment of inquiries internally is not a high priority, as you can see from our charts. Two of the catalogs we did receive were from companies that use an outside firm for fulfillment.

So, follow through quickly to maximize your results. Watch your conversion rate soar!

Stephen R. Lett is president of Lett Direct Inc., a catalog consulting firm specializing in circulation planning, forecasting and analysis. He can be reached at (317) 844-8228 or through his Web site, www.lettdirect.com.