I don’t know about you, but now that the holiday season is upon us, my mailbox is literally overloaded with catalogs. On October 18, the New York Times published an article about Catalog Choice which got me thinking about the catalog industry. This new venture, developed by the National Wildlife Federation, the Natural Resources Defense Council and the Ecology Center, is facilitating consumer attempts to unsubscribe from paper catalogs. According to the Chicago Tribune yesterday, more than 90,000 people have registered (logging more than 550,000 opt out requests) in less than a month since the site was launched.
Now, I know a little something about how a catalog operation works because I ran very large database marketing technology projects at Staples and Eddie Bauer in the mid-late 90’s. So, here’s my take…
The Internet is partially to blame for increased catalog circulation
Despite predictions that the Internet would decrease direct marketing postal mail volumes, a 2005 study by Forrester Research (disclosure: I edited the report) showed that 60% of high-volume direct marketers (those that mail 50M or more pieces annually) planned to increase their mail spend. What that report didn’t say is that the Internet is actually deserves some of the blame for the increase.
Maybe this bucks conventional wisdom, but think about it. In the old days, catalogers could only build their house file by buying lists and participating in cooperative data sharing initiatives like Abacus. Now, if someone comes and buys on my site, then of course I’m going to add them to my house file. And, I’m also going to add them to my list for my sister brands too. It’s a no brainer. So, today, catalogers still use tools like Abacus and they also assume that every online shopper also wants a catalog. Pretty presumptuous, don’t you think?
Well, today’s over marketed and increasingly environmentally conscious consumers won’t have it. That’s what gives rise to organizations like Catalog Choice. And, this is just the beginning.
The industry needs to take action
I definitely don’t have all the answers here. Catalogers are in a tough place and I sympathize. When each catalog turns a profit, it’s hard to come up with a business case to stop. But I think the industry needs to take the lead and start working on the problem. Here are a few ideas to get the ball rolling:
Sure, the ideas I’m proposing will limit your reach, but they will also be viewed as a step in the right direction by your greening customer base. You can get some leverage from this – publicize the fact that you are committed to being more green and helping the environment. But be careful with this piece, don’t say you are green and fail to walk the talk – today’s consumer is watching and now has plenty of channels through which to be heard.
Elana,
Some catalog’s are still profitable because catalogs can be visually appealing, attention getting and can draw-in a customers. However, I share your concern, a lot of expensive design and printing goes in the trash without being opened and therefore is never appealing or attention getting.
Surely cataloguer can determine who actually buys from catologs and can consider dropping others from their lists.
I did note your comment that the Internet actually increase list sizes and therefore the number of catalogs mailed. This suggests that cataloguers are still playing the numbers game. It is hard to believe that they can’t see that separating out those that throw from those that buy would increase roi.
It will be interesting to see when green-thinking by customers starts having a negative impact on mass-marketing catalogers.
John I. Todor, Ph.D., author of Addicted Customers: How to Get Them Hooked on Your Company.
I was really happy when I read the story about Catalog Choice. I bought clothes from a cataloger’s web site, and I found myself bombarded with catalogs from its sister companies. But here’s the catch, when I emailed the various web sites to get me off their lists, half of them told me they had no affiliation with the paper companies and I had to phone them or mail them. There should be a rule that says if you sell my information, you have to handle my unsubscribe request. I shouldn’t have to track everyone down.
The other odd thing about the juncture between the web and the catalog industry is equally frustrating to me. When I buy from a web site, I’m expecting real-time stock information. If a web site says it has a shirt in my size, I expect that the shirt is in stock. But catalog web sites still act in the old mode. I make my purchase, and then I get a postcard in the mail a week or two later telling me the item is out of stock and won’t be in for several months. That’s just ridiculous.
Gwynne Young, Managing Editor, CustomerThink
Elana
I would extend your appeal to all marketers.
I spoke at Henry Steward MOM & DAM conferences in London and Amsterdam recently. Some of the busiest presentations were by organisations promoting the importance of considering environmental sustainability in an historically appallingly wasteful industry. Many of the presentations were by big brands who had also saved a fortune in marketing muda, simply by adopting sustainable measures for internal marketing processes. None of their brands were suffering.
A recent McKinsey survey highlighted the rapidly growing importance to customers of adopting environmental sustainability measures. It is time for marketers to wake up and smell the coffee.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Elana
Only an hour after posting my previous comment, the afternoon mail arrived at home. In it was an expensively produced birthday card from T-Mobile Diamant Service for my wife with a baloon (the kind you blow up yourself) as a present! Although we have multiple contracts with T-Mobile, all in my wife’s name, we are retained rather than loyal. We have had numerous problems with T-Mobile over the years, none of which have been resolved satisfactorily.
My wife was not at all happy with the birthday card.
It is meaningless SPAM like this that gets marketers a bat reputation, that wastes precious marketing resources and that contributes to the mountain of waste paper collected in Germany every day.
This card won’t go into the waste paper bin though. It will go into the Hall of Marketing Shame that I talk regularly about at Marketing Effectivesnes & Efficiency conferences across Europe.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Graham,
I had a similar reaction when my pet insurance company sent my dog a birthday card. My dog was half border collie and very smart, but even so, she couldn’t read. The card wasn’t edible and it didn’t squeak. So it went in the recycling bin. And far from the warm fuzzy feeling I’m sure the company meant to give me, I was left with a feeling of disgust.
Gwynne Young, Managing Editor, CustomerThink
John – Thanks for your comment. You’re right, catalogs are certainly profitable. There’s a reasonably well known example from several years back of a major cataloger that decided not to send catalogs to online buyers. Unfortunately, the company did this during the holiday season and (uncharacteristic for catalogers) didn’t test the strategy sufficiently. The result? Holiday sales (sacred in the industry) tanked. So today, all online buyers get mailed.
Also, did you ever notice that there’s always a catalog in the box when you receive an order? Often, you’ve already received the same catalog in your mailbox. Well, a top cataloger told me that statistics prove that buyers are more likely to repurchase quickly when a catalog goes into the box…
Mailing all online buyers, putting another catalog in the shipment, etc. — these things may now just be conventional wisdom in the catalog industry, but I suggest it’s time for a some new testing. And, given the excitement about green marketing, I also suggest that the catalogers (and all high volume direct marketers for that matter) need to get in front of this issue.
ELANA ANDERSON
Marketing Strategy Consultant
NxtERA Marketing
[email protected]
http://www.nxteramarketing.com
Gwynne and Graham,
Thanks for your comments. You both bring up some great points (and I love the examples of misguided “relationship marketing”). It is indeed interesting that the direct marketers — to this day — are still more focused on reach (quantity) than results (quality).
To your point Gwynne, in this day and age, online buyers simply EXPECT that that the commerce system is integrated with the inventory systems.
I agree with your point Graham that it’s time for all marketers to wake up to the volume issue. DMers in the consumer credit, banking, and insurance industries need to wake up to search marketing already. Also, technologies like contact optimization (e.g., SAS’ Marketing Optimization, Unica’s Affinium Optimize, Experian’s Marketswitch) can help marketers make the tradeoffs but this technology only makes sense for companies that have a high degree of analytic competence. Some of the database marketing service providers can also help with this issue. I’ve spoken with companies that have actually lowered their direct mareketing costs while improving customer metrics consistent or at least keeping them consistent.
The T-Mobile and the pet birthday card (that wasn’t edible and didn’t squeak) are examples of misguided attempts at relationship building. This is a another rich topic for discussion!
ELANA ANDERSON
Marketing Strategy Consultant
NxtERA Marketing
[email protected]
http://www.nxteramarketing.com
This discussion brought to mind something I read a few years ago about a creative way to impress unscrupulous marketers just how wasteful and offensive their campaigns have become.
A major electronics retailer regularly sent a birthday card to individuals from a database of prospective customers. One recipient was so incensed over this invasion of his privacy that he took action. After a little Internet sleuthing, he found the name of the company’s CEO, and then found out his wife’s name and HER birthday. Then he sent the CEO’s wife a birthday card, and asked her how she felt about receiving the card, including the obvious insincerity of the sentiment inside the card.
The result: the CEO was so rattled by the invasion of HIS privacy that he was able to empathize with his prospective customer for the first time. The campaign was immediately pulled.
If catalog mailers that view people through the impersonal lens of “market segments,” and “prospects,” asked this question: “How is our company perceived through our communications?” much marketing noise would be eliminated.
Hi Andrew,
Thanks for your comment. I particularly like the point you made about the impersonal lens of market segments and prospects. I am a true believer in using data analysis, segmentation, and predictive analytics to inform marketing activities. But, we also need to remember that there is a HUMAN on the other side of the marketing communication.
ELANA ANDERSON
Marketing Strategy Consultant
NxtERA Marketing
[email protected]
http://www.nxteramarketing.com