Who Needs Print, You Say?

PATIENT: Doc, almost all our orders used to come through the call center. Now 75 percent come via our Web site. We’re ready to give up on our catalog and go Web-only. Is that a good idea?

CATALOG DOCTOR: To keep your Web business healthy, I advise keeping your catalog. You’ll be surprised how much the catalog drives both sales and profits. It’s probably the primary driver of Web site orders.

PATIENT: But how can I know for sure? I need to be able to justify an ongoing investment in the catalog.

CATALOG DOCTOR: Let’s look at four different ways to learn how your catalog drives sales to your Web site.

1. Chart Web sales vs. catalog mailings.
At every catalog company I’ve seen, Web sales spike sharply when a catalog drops. Just graph Web sales over time and add all your mailing events along the time line. You’ll almost inevitably see that Web orders surge around your catalog’s in-home date.

2. Use your Web analytics tools.
Check your Web analytics to see how many customers are using the “catalog quick shop” to purchase. If they’re typing an SKU number into the quick shop, they have your catalog in their hands. Then look at those customers’ conversion rates. You’ll likely find that quick-shop lookers convert to purchasers at much higher rates than other Web users.

Also look at which products Web shoppers are buying. Are they buying items featured on your most recent catalog’s covers or opening spread? As many as 60 percent of Web orders may include products that were featured in the catalog.

3. Do a matchback.
I hope you do matchbacks. But remarkably, more than half of the multichannel marketers surveyed in the January 2008 Catalog Success Latest Trends Report said they still don’t. If you’re one of them, you should know that a matchback is where you take all the orders that arrived without a legal key code and match back the names on those orders to the names on the catalog mail tapes for the same period. For most catalogers, 50 percent to 80 percent of Web orders come from folks who’ve recently received printed catalogs.

Of course, matchback results are most accurate if you do a great job of tracking other order sources, such as e-mail and search, so those orders don’t end up in the “unknown code” bucket.

4. Conduct a hold-back test.
Do you suspect that matchback is over-attributing sales to your catalog? OK, try a hold-back test. Split a group of names into a control group that receives catalogs using your usual mailing pattern and a test group that is “held back” for the same period; that is, you don’t mail any catalogs at all to the test group. Keep that test group as small as you can to minimize sales loss, but just large enough to get statistically significant results. You’re likely to see this:

The High-Tech Catalog
A high-tech cataloger converted 95 percent of its sales via its Web site. It was natural for management to ask, “Why are we spending all this money on an expensive catalog? Won’t people shop on the Web site anyway?”

So the cataloger conducted a hold-back test over a four-month period. The control group was mailed two catalogs during that period; the test group none.

Just as management suspected, the test group did order, yielding a 0.5 percent response rate. Not bad.

But the group that received catalogs delivered five times the response rate of the nonmailed group. “But wait,” you say, “catalogs also cost a lot. Which delivered more profit?”

The mailed group delivered nearly five times the profit of the nonmailed group. The group’s catalog delivered a great return on investment. Your catalog is probably delivering a solid ROI, too, even though 75 percent of its sales arrive via the Web.

It’s difficult for noncatalogers to grasp the power of a direct mail catalog. For many consumers, their first motivation for placing an order is driven by the catalogs in their mailboxes.

Consumers enjoy spending time online. When they shop, the Web is often their first source. But many view the Web as a convenient ordering tool. It’s similar to when 800 numbers appeared and catalogers debated whether to make their phone ordering toll-free. Consumers flocking to order via toll-free phone numbers soon made that decision for us. We offered a faster, more convenient way to order, and consumers liked it. Today, many find the Web even faster and more convenient than phone. They’re shopping the catalogs, but they’re ordering on the Web.

Hardwired for Paper
Humans are sensory animals, and there’s something wonderfully tactile about holding a printed catalog. A surprising number of people still curl up with a good catalog, dreaming of products they might own that’ll enhance their lives. They get a catalog, read it, ponder it, turn down pages, and when they’re finally ready to buy, they go online to place orders.

Like the human brain, catalogs are random-access. You can skim, go forward, backward, flip here and there quickly and intuitively, no layers to clickthrough, no navigation necessary. In short, catalogs feel more human to many of us. And that delivers sales.

The Web beats catalogs at product searching when people already know what they want. For example, when I want a reading or writing tool, I think of Levenger, so I’ll search Levenger.com first. But I'd never have searched Levenger’s Web site for its new super-duper Circa Notebook with colorful cloth covers, a pen holder and an elastic closure band, because I had no idea such a product existed. It took the Levenger catalog hitting my mailbox to grab my attention by announcing this swell new product.

Catalogs are advertising. Think of them as your paper doll salesmen. They proactively reach out to customers and prospects and create desire. The Web is the passive partner that helpfully handles the sale’s close, upselling and relationship management.

So think of your Web site and your catalog as great partners. And keep your catalog.

Susan J. McIntyre is president of McIntyre Direct, a full-service catalog creative agency and consulting firm based in Portland, Ore. You can reach her at (503) 286-1400 or susan@mcintyredirect.com.