In an effort to grow their businesses, many catalogers look to create a spinoff as a way to get more pages in the mail, contact customers more frequently or in a different manner, or simply to get new customers. The big catalogers such as L.L Bean and Lands’ End have handfuls of titles they’re mailing, so it often looks like it must be the right thing to do. And in fact, spinoffs can be very effective at increasing your revenue. However, they also can drain resources and create more costs that, in the end, reduce your pre-tax profit percentage instead of growing it.
Branding
My old professor, Frank Knight, used to say, that what people wanted was not the satisfaction of their wants, but better wants. —Herbert Stein, Presidential advisor and economist, The Wall Street Journal When I was a small boy growing up on Long Island, the big annual December outing was an overnight trip to Manhattan to visit my grandmother for the movie and Christmas pageant at the Radio City Music Hall and the annual visit to F.A.O. Schwarz, the great toy emporium on Fifth Avenue and 59th Street to see the newest in 0-gauge Lionel electric trains. When I became a man, I put away
Pop over to the business section of your local bookstore, and you’ll find the shelves lined with dozens of books about branding. In addition, articles about branding abound in the business magazines, and a small army of consultants stand ready to lead focus groups, compile surveys, write reports, and make recommendations for branding your catalog. But if you’re like most of the start-up catalogers with which our firm, Olson, Kotowski & Co., has worked over the years, you’re probably chronically short of two things: time and money. Fortunately, forging a unique brand identity isn’t all that difficult or expensive—if you apply a little
Lillian Vernon began selling personalized belts and handbags with a black and white ad 50 years ago. Now, the company offers more than 6,000 items through nine catalog titles and a growing Web business What do Katie Couric, Arnold Schwarzenegger and Hillary Clinton all have in common? It’s not their political affiliations. Think porcelain Easter baskets and personalized bean bag chairs. Now you get the picture: These celebrities are among the 23 million people who have shopped the pages of Lillian Vernon’s catalogs. The namesake business Lillian Vernon launched in 1951 on the kitchen table of her small, Mount Vernon, NY, apartment has
The very thought of 235,000 running shoes is enough to make a runner swoon. I have known runners who keep a running shoe closet—when opened, no fewer than 20 pairs of shoes tumble out. Runners are a strange, quirky, masochistic bunch—knowing how to speak their language is crucial to making it in the mail-order running shoe business. But you really only have one person to consult—Mike Gotfredson. He is the founder and CEO of Road Runner Sports, the world’s largest running store, catalog and online business—and an avid runner. Gotfredson began Road Runner Sports in 1983. He had a wife, four
If you’ve paid attention to popular culture during the last 40 years, you’ve come to learn there are certain things in life that money, apparently, can’t buy: love, happiness and all of those priceless things mentioned in the MasterCard commercials. But in the world of direct marketing, we have another to add to the list—customer loyalty. The Customer Hierarchy If you segment the customers in a cataloger’s database to fit into a typical customer hierarchy, you’ll see various levels of buying activity and inactivity that move a person from being a prospect to a “trier” to a buyer and so on until loyalty is
According to estimates, there are about 650,000 active licensed pilots in the United States, including about 100,000 who work for airlines. So, by any measure, the market for catalog companies selling supplies to individual, recreational or hobbyist pilots is not very big. But this market, known as “general aviation,” is potentially lucrative, owing to the upscale demographics of the target group. How well are general aviation catalogs marketing their wares? How good is their overall strategy and positioning? We shared a number of general aviation equipment catalogs with renowned direct marketing guru Estin Kiger. We wanted to get his viewpoint on what these
Just before I sat down to write this, The New York Times reported the death of yet another beloved—albeit little known—boutique institution, Gorsart Clothes. The downtown Manhattan men’s clothier had served the Wall Street community since 1921. In the words of Times writer Sherri Day, The last straw may have been the advent of casual Fridays—and Thursdays and Wednesdays—which eliminated much of the need for the crisply tailored suit and the power tie. Where Gorsart was unable to change with the times, another great New York men’s clothier, Barney’s, changed too much—only to be taken over by its creditors in 1996. Founded in
There’s nothing like having a billionaire for a neighbor. Especially one that throws a little business your way, like Microsoft did when it named Multiple Zones International (MZI) its chief supplier of computer hardware, software and services. The contract is one of many changes taking place at MZI. Since moving online in 1995, MZI has seen fast growth in revenue and transactions, creating a $115-million company. What began in 1989 as a three-title catalog company with PC Zone, Mac Zone and The Learning Zone, has grown into a multi-channel retail operation that includes a new business-to-business division. The new Zones Business Solutions division is
Several years ago I went to Peter, my doctor, for a routine checkup and saw some colorful boxes on the end of the counter. Patricia, the office manager and Peter’s wife, said they were dietary supplements for people over the age of 50. “Should I get them?” I asked. “I take them and I feel wonderful,” she said. “Do you and Peter get a piece of the action?” She said she did, which I had no problem with. So I ordered LifePak Prime for my wife Peggy and myself—60 little cellophane packages, each with four horse pills to be taken twice a day with