Lett Direct Inc.

Postage rates are expected to increase from 13 percent to 20 percent in 2006, marking the first increase since mid-2002. It’s important to spend the next 12 months preparing to absorb this increase. Don’t wait until the increase is in effect before deciding what to do. Now is the time to begin making adjustments. Often catalogers make cuts in the wrong places. Their intentions are good, but the actions taken aren’t always the best in the long run. Here are two actions not to take when preparing for the postage increase. 1. Don’t stop mailing to Web-only buyers. When you look at your source code report, it

We’ve all done dumb things that I’m sure seemed smart at the time we were doing them. I look back to my 33-year career as a cataloger and can think of things I did that were really silly. It’s all part of the learning experience. This month, I’m taking a slightly different approach from my normal columns. At the suggestion of my friend and client Shep Moyle, president and CEO of Stumps catalogs, I’ve devised a list of nine catalog management mistakes to avoid. 1. Don’t hire experts, even when needed. Or hire/fire the wrong person. I’ve seen this happen:

When looking at your income statement, it’s tempting to cut prospecting to save money. But is that really the right thing to do? You have to invest in converting prospects to buyers. How much to pay for a new buyer depends on what you can afford and how fast you want to grow. Overspending to acquire a new buyer and trying to grow too fast can lead to financial ruin. On the other hand, not investing in housefile growth can have a negative effect on your business. This month I’ll examine how much to spend to acquire a new buyer. Invest to

Here’s how to answer those questions. Prospecting for new buyers enables you to maintain a set level of revenue from year to year and grow your business. In simple terms, if you stop prospecting, sales and buyer counts will decline. It’s important to prospect at least to a level that will maintain your 12-month buyer count. And if you want to grow your business, you have to prospect for even more. As you know, it’s difficult to achieve incremental break-even prospecting given today’s cost structures and response rate levels. So, when is the best time to prospect in order to maximize

By Stephen R. Lett This article will examine the best ways to test insert media and outline what results you can expect. Catalogers have historically relied on outside prospect lists to generate new buyers. But it's becoming more difficult to find good lists and thus, fresh prospect names. Moreover, list universes are flat or declining. Consider alternative methods of generating new buyers. Insert media, for example, can provide a cost-effective way to generate incremental catalog business. Of course, insert media can't replace the use of outside rental lists. But it's wise to test other ways of attracting new buyers. This month,

Catalogers have historically relied on outside prospect lists to generate new buyers. But it’s becoming more difficult to find good lists and thus, fresh prospect names. Moreover, list universes are flat or declining. Consider alternative methods of generating new buyers. Insert media, for example, can provide a cost-effective way to generate incremental catalog business. Of course, insert media can’t replace the use of outside rental lists. But it’s wise to test other ways of attracting new buyers. This month, I’ll discuss what insert media is, the best strategy for testing it and what results you can expect. Insert media encompasses the forms

Benchmarking often is described as a set of performance standards for a specific task. And best practices entail tried and true procedures that can help improve your catalog business. Although many industry benchmarks and best practices are viewed as standards, in reality most need to be adjusted to meet the requirements, limitations and needs of a particular catalog business. There’s no one model or standard of performance that works for all. For example, the return rate for an apparel mailer may be 25 percent (i.e., the standard), while a food cataloger might see a return rate of 3 percent (the standard for

Few catalogs make money on first-time buyers. Ultimately, the profitability of a new buyer depends on his or her lifetime value (LTV) to your company. Catalogers tend to evaluate lists based on the first sale. You compare the results against an incremental break-even point and determine if that particular list will be mailed again. That is, some catalogers take a short-term view to a long-term opportunity. It’s the value of a new name over time that’s important. LTV helps you determine how much you can afford to invest in a new buyer, looking beyond his or her initial purchase. For example, you can

More than 60 percent of the success of any mailing depends on the lists used and the circulation plan in general. Catalogers don’t always spend enough time on the critical steps to effective and proper circulation planning. They worry more about the design and layout of their catalogs. To be sure, the look of your catalog is important. But in the end, it’s the circulation plan that determines your ultimate success. This month, I’ll review the critical steps to circulation planning. 1. Evaluate your historical results. Start by examining the strengths and weaknesses of previous mailings. Compare mailings against the same

Co-op databases provide a valuable source of quality names for many product offers. For most small- and medium-sized catalog companies, 50 percent or more of prospecting circulation goes to names selected from such databases. Prospect names selected from co-ops are a good value for the money. Why? First, the names are selected according to a model, which means they resemble your own customer database. Second, the names rent for less than most outside response lists. They’re “net” of your housefile, which translates to a lower cost per net name. Co-ops may appear to be about half the cost of outside lists, but in