ARE YOU WATCHING other companies’ sales climb while yours remain static or drop? Have you come to a turning point, unsure of how to take your business to the next sales level?
Even if you’re not certain about where your business stands, it’s important to determine and retain the things that can make your business grow and toss out the ones that are outdated or even disabling.
The solution is a business review. Now, a checklist alone for a business review often can cover five pages, so this is no small undertaking. But don’t stop reading. By taking the following steps, you can get a good start on this highly beneficial project.
Know Your Market Position
Is your positioning statement or charter current or has it faded with the times? Is your company a victim of look-alike sameness? Does your printed catalog have nothing in common with your Web site?
The design of Recreational Equipment Inc.’s early summer 2000 catalog – the Rei.com Online Shopping Guide – echoes that of its Web site. It gives the print version a fresh, timely look and helps drive business to the Net.
What’s the size of your firm’s overall market? In other words, if you sell toys, how big is the toy market in all sales channels? How big in direct? What’s your firm’s share of the overall market and the direct market?
Now that you’ve identified your competitors, what do you really know about them, besides basic numbers? To find out more, get on their mailing lists. Order something under one name, and don’t order under another. See if they use different techniques based on your select on their list (for example, buyer vs. requester). If the company is public, buy a tiny bit of stock for regular, no-brainer updates. Or check the competitors’ Web sites and read all you can about the company.
Construct regularly updated competitive grids for overall position, merchandising, creative approach and service. Find your rivals’ weaknesses and understand their strengths so you can be satisfied that you’re capitalizing on both.
Know Your Merchandise
This isn’t as obvious as it sounds, as many companies don’t have a real handle on cost of goods, cost of promotion, what’s selling best to whom and so on. At an absolute minimum, you must have an analysis that tells you which products are paying for their space by item, category and price point. This is read in conjunction with gross and net sales, and gross and net units.
Taking this analysis just a half-step further, also know all the info previously mentioned by segment. That is, what’s the one-time customer buying vs. the second-time customer, and so on.
Do you know what positions on the catalog page itself drive the best sales? Which models tend to make the garments fly off the page? Or do certain items sell better when they’re not being worn by a model? Do silhouetted pictures work better than boxed photos?
Are you squeezing every cent out of your margins, without raising your prices to the point where you see response falling off? Don’t assume that raising prices automatically means less response; for some product types it can actually boost response. What kind of product returns are you getting and why? How many units per order is your company receiving and how is that affecting your average order?
Know Your Circulation
How well is every part of your list performing? Break out and analyze every segment of your house file. How long do you allow that expired buyer to be mailed your expensive catalogs? Put a regular reactivation program in force and get the deadwood off the mailings.
Are you pushing your mailings as frequently as possible, but making sure that you’re mailing to those who are most likely to buy? Have you pushed the frequency too far? How often are the best buyers buying? Through merchandising and incentives, can you get lesser buyers to come up to your best buyers’ standards?
Be careful that you don’t make the incentive or merchandise offer one that simply gets customers to spend all their money now but hold off buying for a longer time the next time. Some believe that taking customers out of the market for a while with deals that encourage them to buy more than they really need over a certain period is good because it can steal that customer from another company. But it can also adversely affect your future sales, creating a false sense of concern about your overall strategy.
The timing of in-home dates is a constant test, not a given. What tests are you using to reward frequent purchasers, reactivate inactives and convert one-time buyers and requesters into multibuyers? A mailing should almost never go out without a testing plan in place to improve results.
How much money are you making per book, per segment? Where’s the real business coming from? And where are the trouble spots and opportunities?
Make Your Creative Work Hard
Talk to just about any consumer today and you’ll get an earful about the millions of catalogs they feel they receive every week. The only way they can deal with the deluge is to dump most of them.
What will make them keep a catalog? A name they know, or a new name that looks interesting and has great creative.
What’s meant by great creative? Something that stands out, wakes a reader up and doesn’t look like anything else in the pile. Now is the time to let your creatives loose. The tried and true may be OK if you’re offering a name brand or if your book’s new – but if you, like most catalogers, don’t fall into either category, take some risk on the cover…and inside the catalog.
Remember: Tried and true may be tried and not so true.
Sure, there are useful rules and regulations, like making sure the copy is readable and connected to the photo, that the photo really represents the product and that the pagination is logical, but try some new approaches also, like REI did.
Since many consumers will tear out catalog pages instead of just bookmarking them, make certain your catalog’s ordering info is on every spread – not just the 800 number, but the Web site and fax numbers as well.
Bottom line, look at your book as if you’ve never seen it before – and be ruthless. Is it motivational? Does it really enhance your business? Does it convey, in an instant, why you should choose this catalog over any other method of buying or any other company? If not, it’s lazy creative and needs a serious boost.
Don’t Kid Around About Service
We talk a lot about how great our service is, and surely there are some great catalogs, but consumers say that a lack of personal attention is one of the reasons they don’t shop from catalogs.
If you’re proud of your catalog’s customer service, shout about it from the pages of your printed catalog and from your Web site. But if you know your company has a ways to go in this area, learn how to do it right – and start as soon as possible.
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