Who's Making the Net Work? (1,273 words)

by Jack Schmid

My first formal introduction to Marks & Spencer, England's giant retailer, was to fly to London to have lunch with the chairman. M&S was considering expanding its direct selling efforts into an expansion of its home catalog and into an apparel catalog. The chairman asked all the preliminary questions about our company's credentials and why M&S should employ an American catalog consultant. Apparently those questions were answered to his satisfaction, and he then asked the big question: "Why should M&S be in catalo-ging, anyway?"

My answer had little to do directly with cataloging, but a lot to do with the topic of this article. I responded, "If the Internet and selling on the Web is at all in the future plans of Marks & Spencer, catalogs will get you a good part of the way."

The moral of this story is that cataloging and the Internet are, for the intermediate future, irrevocably connected. The linkage is obvious. If planned correctly, catalog photography can be used online, the catalog can emphasize the e-catalog, the e-catalog can be used for intermediate communications with customers and so on. For business, consumer and retail catalogs, the Internet must be part of the marketing mix. Business-to-business Internet selling is maturing quite nicely, but consumer and retail-oriented catalogs need to "get with it."

Let us look at some key statistics recently published about the Internet. A terrific report recently produced by Gruppo, Levey & Co. indicates that:

1. On profitability:

• 43 percent of those responding report profitable Web sites.

• 25 percent expect their Web site to be profitable this year.

2. The Web is evolving into a distinct direct marketing channel and those companies that use direct marketing practices will improve their likelihood of success on the Web.

3. Companies that use direct marketing strategies and practices on the Web are valued more highly by the investment community.

Wow! Those are powerful words and harbingers of good things to come, if catalogers can be attentive and help drive Web activity.

The Direct Marketing Association, in a recent research survey of its members indicated that:

• 90 percent of its companies responding to the survey have a Web site, up 8 percent from 1997.

• 95 percent reported using the Web for sales or marketing, up 12 percent from one year ago.

The primary purposes of the Web site were reported to be marketing information (88 percent); lead generation (60 percent); and sales and e-commerce (51 percent).

Most companies recognize the importance of an Internet presence, but the big questions are, "Who's making the Net work? And how can it work for you?"

Be Passive-Aggressive

One of the most frustrating issues for catalogers to overcome in establishing an online offering is the passive nature of the Internet as a communication medium. Where traditional catalogers are accustomed to mailing to prospects and customers based on targeted selections, e-catalogers are generally at the mercy of the surfer. In other words, your customers, or prospective customers, have to find you. Web sites have been likened to retail stores —unless you are in a high traffic mall or advertise your store, there is little chance that prospective customers will ever find you.

Herein lies the primary difference between paper catalogs and online catalogs: paper catalogs are intrusive by nature, online catalogs are passive by nature. Once businesses understand this fundamental limitation of e-cataloging, they can become creative in the ways that generate more traffic and, importantly, more sales through the Web.

Marketing Skills

Marketing the online catalog may be the most difficult task related to putting a catalog online. The million-dollar question always seems to be "How do we get more traffic to our site?" The half-million-dollar question: "How do we keep them coming back?"

Generating first-time traffic to a site is crucial, and not always easy. Proven techniques include:

• Participate in online catalog portals such as CatalogSavings.com, CatalogCity.com, FreeShop.com or CatalogLink.com that offer catalog requests, product sales and/or links back to the e-catalog's site.

• Develop alliances with vendors and clients to reciprocate placement of links on each other's site.

• Send targeted e-mail to online mailing lists. Be sure that the recipients on the list have opted in to the list to ensure that your message does not get a negative reception.

• Include your web address on every piece of marketing material that goes out the door, particularly to prospects. Where paper catalogs show their toll-free telephone number on every page, they should also include their Web site if they expect people to use it for ordering directly.

As we all know from traditional cataloging, getting customers to come back is how we ultimately make money. Similarly, the ease with which shoppers can leave your site to go to another makes retention an integral part of building an online revenue stream. There are several key elements to keeping customers coming back:

• Get permission to communicate. Getting customers to opt-in to an e-mail marketing program makes follow-up communication much easier. J. Crew, Victoria's Secret and Cabela's do an excellent job of keeping the lines of communication open with customers through all seasons. Omaha Steaks (omahasteaks.com) even puts out an electronic version of its catalog via e-mail. The message itself is a self-sufficient online ordering device.

• Make an offer. Drive repeat purchases with e-mail offers or offers made in the paper catalog to encourage online sales. Tweeds recently did this with a pre-printed dot whack driving customers to Tweeds.com for a $5-off bonus for online purchases.

• Provide helpful customer service. Without a customer service rep to walk customers through the ordering process, your site needs to provide everything needed to order with comfort and ease.

• Make purchasing easy. Design an order form that captures the necessary information succinctly. And don't forget to capture a source code if you're driving sales to the Web from the paper catalog.

• Keep the site fresh. Some e-catalogs update their sites daily with online specials. Just as with paper catalogs, existing customers want to see what's new. Use icons and special bursts to point out those items. If you lack the staff for more frequent updates, be sure to refresh your content at least seasonally.

Another technique that works remarkably well with catalog requests from the Internet, is to have customers opt-in and provide you their e-mail address. Then promptly send out the paper catalog and follow up the catalog with a special e-mail offer. In other words, reach these customers in the same manner they reached you.

The beauty of the Internet is that an organization can secure multiple addresses and operate transparently as two distinct organizations, not unlike catalogers that publish multiple titles. This chameleon quality means that catalogers can use the Web, among other things, as an avenue to liquidate inventory without undercutting the catalog brand or current merchandise. A good example of this type of operation would be Andy's Garage

(andysgarage.com), an online outlet for Fingerhut.

Birds of a Feather

Regardless of specifics, the most successful online catalogers are taking advantage of the economies that come from integrating the traditional catalog with the e-catalog. Whether sharing photography and copy elements or using one media to generate sales and traffic for the other, it is undeniable the two formats go hand in hand. The previous statement implies then, not mistakenly, that a solid paper catalog goes a long way in making the Net work.

Jack Schmid is president and Steve Trollinger is vice president, marketing, at J. Schmid & Associates, a catalog consulting firm in Shawnee Mission, KS. Call (913) 385-0220 to reach them.