Survival Strategies for Small Direct Marketers, Part 1 (1,202)
By Lois Boyle and Steve Trollinger
Are you avoiding these common pitfalls?
What a ride small catalogers have had in the last two years! For those of you still around, you know what we're talking about. Competing with the "big guys" has become tougher than ever. Smaller budgets, limited resources, higher costs to mail and a weak economy all have contributed to a tough, competitive outlook. It's the small catalogers with systems in place that allow them to manage adversities that are riding out the storm.
In this two-part series, we first will outline the pitfalls trapping small direct mail companies, then review the key questions management should be asking of their business practices to survive the storm. Do you recognize any of the following key pitfalls?
1. No obvious roadmap
A plan is not a plan unless it's down on paper. Most catalogers—even the big guys—think they have a long-range plan. In many cases "the plan" is not written down. There's no clear path on how to reach the goal or the only focus is on the short-term. At a minimum, small catalogers who want to grow should look at a three-year plan that starts with an end goal and outlines the following:
- Financial objectives: goals for both the top and bottom line including pro forma profit and loss statements and cash flow requirements for several possible scenarios.
- Name flow plan: an outline of customer acquisition and retention efforts over time.
- Order flow plan: an evaluation of orders based on the name flow plan above that incorporates average order value to determine if your financial objectives can be met.
- Marketing plan: a strategy for contacting and communicating with customers and prospects across a variety of media channels over a period of time.
Having a plan does not preclude you from shifting gears because of surprises in the economy or unique opportunities, but it gives your team a guide from which to build and reach campaign and overall business objectives. Working only one campaign ahead is short-sighted and typically will not allow for sustainable growth.