Survival Strategies for Small Direct Marketers, Part 2 (1,269)
Along the way, you should be asking and answering questions on acquisition costs, retention rates and segmentation opportunities. Without a plan, good partners and stringent analysis, your catalog business might never grow to its potential.
What customer counts and orders do you need to fulfill your financial goals? Have you outlined contingency plans for dealing with greater- or lower-than-anticipated average order size or response rates? What can you afford to spend to acquire a customer? Do you have an established mix of prospect lists and customer file mailings in your mail plan? Have you outlined a contact strategy that looks beyond the next mailing or two to the next year, with projected sales?
Do you have a process for capturing source codes? What about with online orders? Does your staff understand the importance of getting a source code from every customer who calls in? Do you understand the definition of success among mailings in terms of response rates, AOVs, customer acquisition costs and sales per catalog?
Are you relying on data to drive your list tests, offer tests and rollout decisions? Do you know where your best customers come from? Can you perform lifetime value analysis on the customers in your database? Are you able to segment your database for effective targeting of offers and communications? Do you know your historical customer retention rate, and have you built a program to reactivate older buyers and "refill the bucket" of lost buyers?
The database will give you the ammunition to determine whether customer file attrition is a problem and some insight into how to address it.
Some would argue that a soft economy, plenty of competition and dwindling consumer confidence have made survival for the small and new cataloger more difficult. Ask questions and think about your business. Take a proactive position to grow, and have a plan for how to get there. You can survive!