Netting New Names in Lean Times
Gathering new buyer names for your housefile presents a challenge in any economic climate. But consumers’ current spartan buying habits have some catalogers puzzling about how, or even how much, to prospect. Some are using new avenues, while others staunchly stick to the basics. Associate Editor Gabrielle Mosquera asked three catalogers to share their thoughts on prospecting in today’s challenging environment.
Larry Brown
founder, Whatever Works catalog
Market: business-to-consumer
Type of products: garden, home and pest-control items
Catalog Success: What do you think are the most popular prospecting media for catalogers today and why?
Brown: As always, it’s other catalogs and their databases and what works for you out of that. Generally speaking, an Internet buyer is not and never will be a catalog buyer, although getting a catalog order through the Internet is better for us as a business because it requires much less handling and [can generate] more profit.
CS: Have prospecting media changed for catalogers in recent years?
Brown: They’ve changed because a lot of catalogers thought they could get a huge database to mine from the Internet. And we’ve all found that it’s mutually exclusive. The best way is still the tried-and-true way: to get names from similar businesses. At least you’re getting people who have a predilection for buying that way.
CS: Do you think catalogers are prospecting less and mailing more to their customers at this point?
Brown: Unquestionably, yes. At the top of it, it’s economics. Here are people I own for nothing, so of course I’ll mail to them, and my cost will be lower. It works, but in essence it’s shortsighted. You’re going deeper, but you’re not going wider. It has to be a deal between the two.
CS: How would you recommend prospecting “wider,” as you say?
Brown: Run product ads in genre-specific publications to attract the exact customer for your catalog. Pick items that are unusual with a high perceived value, but a low retail one. Even though the CPM will be higher than in a general-interest publication, you’ll get a more qualified customer. Offer a free catalog with every order; it’s a good value-added conception.
In the old days, when we saw an interesting list we called the catalog itself. I still call list managers. Generally speaking, most catalogers will help other catalogers.
CS: What do you think is a healthy percentage of catalogs per year to mail to prospects?
Brown: There’s no percentage. The time to prospect is when you’re doing well, when you can afford to risk. When the business is lousy, you’re going to get nothing because everyone’s in the same boat. To put a number on it, I think, is a mistake.
CS: What do you think of the following prospecting strategies?
1. Using cooperative databases.
Brown: They’re awful, especially for a small mailer. Let’s say I mail six times over seven months. All the names I get and put into this database are going to get 100 catalogs from bigger mailers before I can mail to them a second book. Since I’m not mailing huge quantities, that kills me.
Big mailers have a much lower break-even point than I do; they can afford to mail names once or twice just to get them in the fold. [With co-op databases] I’m giving away my gold and getting fool’s gold back.
2. Differing catalog creative for prospect mailings.
Brown: That’s good when you’re profitable, when you can afford to throw money at it. Creative tests are great, and it’s definitely a way to attract new people to your book. Just make sure you have a control to test against.
3. Using e-mail.
Brown: Hate it. Useless. I don’t believe you can convert an e-mail buyer to a catalog buyer unless you give away the store. They expect free shipping and outrageous deals, and the conversion level is awful. Maybe to a younger audience this can work, but most older customers are set in their ways.
4. Using search engine keyword marketing.
Brown: Doubly useless. Maybe triple. Doing sales and prospecting for new customers via the ‘Net will just be a part of the overall marketing plan of every cataloger. It can easily be 20 or 30 percent of business, but it will never eliminate the printed book.
CS: How would you recommend catalogers approach prospecting now?
Brown: Push everything off their desks — all their reports. Get together all the catalogs even remotely similar to the field they’re selling merchandise in. Look through them and figure out why these books would have names that would work for your book. Don’t just talk to the list broker; do your own homework. And speak to other catalogers — speak to the owners.
I’m a big fan of exchanges. We’re not in the list business, we’re in the catalog business. The list is the by-product. I think people really have to get back to the basics of what made them successful and learn from other people. That’s the best way to prospect.
Allan Share
president, New Life Systems catalog
Market: business-to-business
Type of products: spa equipment and proprietary products
Catalog Success: What does your prospecting mix consist of today and why?
Share: As a b-to-b cataloger, 6 percent of our business is from the Web, although we have a lot of clients who call to say: “I looked at your Web site, have your catalog with me and would like to place an order.”
We know there’s a blending of catalog and Web site in terms of ordering. Where it seems like a lot of companies have a great Web site that’s supported by a catalog, it’s exactly the other way around for us. We’re in a right-brain business — people want the full-color catalog. Looking at a monitor just doesn’t cut it for them.
CS: How does that affect your prospecting?
Share: We’re extremely hard qualifiers. We requalify every single person who asks for a catalog via e-mail. If they don’t seem like a strong candidate, we direct them back to the Web site. If they persist, we tell them they can e-mail again for a catalog and get one and a $25-off coupon as well.
Even if they come through a link, we send them back through the Web. We’re strictly a b-to-b catalog, and there are many consumers who try to subvert that and get a book. I’m not in the business of wasting catalogs; that’s why we hard-qualify everyone. But we make up for mailing less catalogs by mailing them first-class.
CS: Do you think catalogers are prospecting less and mailing more to their customers right now?
Share: As a small cataloger, we’re still deep into prospecting. Our first mailing of 90,000 this year was 78-percent prospects.
CS: What do you think is a healthy percentage of catalogs per year to mail to prospects?
Share: I don’t know the correct percentage; we’re mailing right into the teeth of a bad business environment, yet [prospecting] is the major way we make the phone ring at our size level.
CS: What size is that?
Share: We’re a $4 million company, so our prospecting is a huge part of what we’re doing. If I had 100,000 names on our house list, would I be mailing to 700,000 prospects? I don’t know.
CS: Speaking as a small mailer, do you hesitate to use a co-op database because a larger mailer might benefit from your names more than vice versa?
Share: I think in all businesses some people are paranoid. And if you run as a five-star operation, you shouldn’t have much to fear from the competition. You’ve got to stretch a little bit.
We’re always willing to try new things, especially in this economy where nothing seems predictable anymore.
CS: What do you think of the following prospecting strategies?
1. Differing catalog creative for prospect mailings.
Share: I just saw a bind-in for 15 percent off on your first order in a catalog that came to me personally from a company I never ordered from before. I may use that in our prospecting. Something about it intuitively struck me as being a good look. We haven’t yet tried a dot whack with a discount attached.
2. Using search engine keyword marketing.
Share: Absolutely. We’re in the middle of fixing up our metatags, keywords and other Web items to boost that 6-percent response rate. We noticed that retailers that carry our private label products show up higher than we do in search engines — not good.
CS: How do you approach prospecting in the current economic climate?
Share: Our catalog plan is in place for the year for the six mailings we’re doing. I don’t see how cutting prospecting is the way to be conservative. We’re already out here spending half a million on mailing and prospecting.
If we’re going to be conservative, we’ll cut other places. For example, we’re running low on thank-you notes. So we won’t order anymore, and we’ll just have to stop sending them. But let’s not cut what we know is the driving lifeblood of our business.
Marisa Thalberg
senior vice president of marketing and new business development, Sure Fit catalog
Market: business-to-consumer
Type of products: furniture slipcovers
Catalog Success: What is your prospecting mix like?
Thalberg: While most catalogers tend to do most of their prospecting via lists, at Sure Fit we’ve adopted a very different, two-step model for acquiring leads: We run a substantial amount of TV and print advertising, which prompts people to request a catalog and/or visit our Web site, from which we generate orders.
The advantage is that all of the leads generated this way are opt-in, which makes the response rates very strong. And importantly, the advertising support works to build our brand at the same time.
CS: Has your media mix changed?
Thalberg: Our overall mix has not changed that much, though we’ve increasingly turned to the Web to generate leads via search engine optimization and affiliate programs.
CS: Do you think catalogers are prospecting less and mailing more to their existing customer bases at this point?
Thalberg: More mature catalogers who’ve already achieved high penetration within their universe of prospective buyers are likely spending more on optimizing buying with proven customers — particularly in light of the current challenging economic climate. We believe we still have great potential to build awareness and interest with as-yet-untapped consumers, so our prospecting still is integral to our marketing efforts.
CS: What do you think of the following prospecting strategies?
1. Using cooperative databases.
Thalberg: Of course it’s all contingent on the quality and synergy of the other databases, but we think this could have good potential for us as we grow.
2. Differing catalog creative for prospect mailings.
Thalberg: You have to walk a line between having one cohesive message and image that you impart into the marketplace versus tailoring a message to a particular audience. Ideally you do both. Since our definition of prospecting is really fulfillment of catalog requests, as opposed to list buying, the extent of our different catalog creatives is that we use a bind-in card for prospects to say “Thank you for your request” and to describe services we offer.
Beyond prospecting, we’re increasingly moving to having second and third editions that go to different segments of the database with different creative.
CS: How do you think catalogers should approach prospecting now?
Thalberg: There isn’t a one-size-fits-all solution. The answer best lies in the maturation/penetration of the business. Our model works for us, and though it entails a heavy investment, spending on a national level reaps national-size leads and orders, while simultaneously building our brand.
