Are Your Sales Lagging Behind Plan?

If sales are dipping and your internal expenses are based on a plan you aren’t meeting, you need to get back on track.

The questions to ask yourself: How do you react to less-than-desirable sales results? And how soon should you take action? While there may not be quick fixes, I’ve identified some strategies that can help you avoid a disastrous year.

This month I’ll discuss generating additional demand revenue — not cutting expenses. It’s difficult to slash your way into profitability, and the long-term effect of that type of quick-fix can be devastating to business. Following are 12 ideas to take for a test drive:

1. Use a bounce-back offer, which you can do immediately with very little lead time required. Place a coupon for $5 or $10 off a next offer in all outgoing packages. Be sure the coupon is the first thing customers see when they open the carton. Hit them in the face with an offer!

The offer should have an expiration date. It’s difficult to use an exact date with bounce-back offers, since they’re inserted over time. Simply state that the offer expires in 30 days.

Money-off, bounce-back offers don’t condition the customer to expect another offer the next time, thus making them an effective way of generating repeat orders from satisfied recent buyers.

2. Promote to your catalog requesters. Make a strong offer to catalog requesters to increase their conversion rates. Test putting a label (which states the offer) on the covers of catalogs being used to fulfill catalog requests. You also can make an offer to the inquirers or requesters as part of your normal mailings; have your printer apply a dot-whack to the catalog’s front cover.

3. Promote to prospects. Offer prospects a dollar amount off their first orders. It won’t create expectations that another offer is coming. Rather, it would be an offer that’s event-driven, which is the most effective type of promotional offer you can make. In this case, the event is the conversion of a prospect from an outside list to a new buyer (i.e., for new buyers only). There’s a clear purpose for making the offer, thus marking it as event-driven.

4. Maximize merchandising opportunities. Increase page count, and add more items. Often, a lag in sales isn’t the result of a problem with circulation, but some other factor, such as merchandise offerings. Check your catalog’s mix of price points and category breakdowns to be sure they’re consistent with what you’ve offered in the past. More merchandise (resulting in more pages) will increase response rates and sales.

5. Use your contact center. Empower sales reps to make offers. Then give reps more than one offer from which to select, and let them choose the offers they feel are most appropriate for each caller. Pay a commission for add-on sales. You’ll be surprised how much incremental revenue you can generate from contact center employees.

6. Promote to Web buyers. They’re very sensitive to promotions, and they expect them. If you must increase demand, make a stronger offer for customers who buy from your Web site.

7. Add a mailing to your best buyers, especially if you need to generate more demand revenue. It’s hard to over-mail your top-performing RFM (recency, frequency and monetary value) housefile segments. You generally can squeeze more revenue from dependable customers by mailing again (and again).

8. If you’re a business-to-business (b-to-b) cataloger, develop an outbound telemarketing program. When done right, an outbound program is an effective way to generate additional revenue. Start by calling customers who haven’t purchased in awhile, or contact people who’ve requested a catalog but haven’t yet ordered. In short, have a call strategy.

Bear in mind that not all of your contact center reps will be good at outbound calling. So avoid using your inbound department to make outbound calls. Instead, use a service or hire people with appropriate telesales experience. Be willing to pay a 5 percent to 7 percent commission on all sales generated by outbound reps.

9. Mail a catalog and a special offer to gift recipients. Since they’ve received items from your catalog, your customers obviously think these folks have an affinity with your merchandise. This group of non-buyers represents an in-house list you can tap for more revenue.

10. Use title slugs, another b-to-b mailing technique in which you use your own customer list as a prospect file. Simply remove the name of the customer and insert a function title (e.g., Attn.: Sales Manager or Purchasing Agent), and mail to the business and address already on your file. Title slugs are a good way to generate more revenue from companies already doing business with you. The use of slugs helps you reach other influential people within organizations.

11. Try postcard mailings. A tool used to react quickly to lagging sales is a postcard mailing with a quick expiration date and offering a discount (e.g., dollar amount off, percentage off). The discount or offer is applied to a current mailing. Customers can take advantage of the special offer online.

12. E-mail best customers who’ve opted in to get e-correspondence. E-mail blasts can be done quickly and for very little cost. As with postcard mailings, e-mail campaign specials should have a quick expiration date to create a call to action.

What Not to Do

Be careful not to promote your way out of a sales slump, a tactic that can be dangerous. After a couple of strong offers in an attempt to fix your sales problem, customers will be conditioned to expect a strong offer the next time they order. To avoid this, make offers that are event-driven, as opposed to offers made across the board.

As you can see, there are tools of the trade you can use to generate additional demand revenue. Obviously, there’s a cost/benefit relationship to each one of these techniques.

Lagging sales most often aren’t the result of a circulation issue. But circulation programs can help generate more revenue. Don’t panic, and don’t react too quickly. Take a longer-term view, and be sure you aren’t throwing good money after bad. While it’s been said the three most important factors are sales, sales and more sales, be careful not to have a top-line mentality. In the end, it’s the bottom line that counts.

Stephen R. Lett is president of Lett Direct, a catalog consulting firm specializing in circulation planning, forecasting and analysis. He spent the first 25 years of his career with leading catalog companies. He can be reached at (302) 537-0375, or by e-mail via his Web site at www.lettdirect.com.