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Copyright 2003 by Arthur Middleton Hughes. Click Here for Term of Use.
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What does this mean for the catalogers Financial success. The problem of getting paid for products has almost disappeared. Sophisticated telesales. Today s call center software is one of the most complex aspects of cataloging. Millions of agents staff centers on a 24/7 basis. Using Caller ID, the call center software recognizes previous customers and calls up their purchase history on the screen before the call is answered. The computer terminal screens enable the agent to nd any product immediately, so that she can immediately begin to discuss colors, sizes, and prices effortlessly. If the caller is a previous customer, the agent doesn t have to get the name and address a second time. No-hassle return policy. Modern catalogers make it very easy to return merchandise and the best ones pay the return postage. Customers may exchange or get a credit or a full refund with no questions asked! Such service was unheard of a decade ago, but it has become standard; 20 percent of all items ordered are returned.
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With all these new developments, you would think that catalogers would be in the forefront of database marketing today. You would be wrong. While every cataloger creates a house le of customers so that it can mail them catalogs and exchange their names with other catalogers, few catalogers have a marketing database system. Recent studies show that catalogers with sales of more than $100 million per year spend an average of $18,000 on database marketing. That does not pay the salary of even a half a person to do database marketing. Those with sales of less than $100 million spend almost nothing in this eld. Why not To explain this, let s de ne what we mean by database marketing. In modern DBM, a company keeps track of customer purchases and crafts special customer communications that are designed to build retention, referrals, loyalty, and cross sales. Why aren t catalogers doing this The explanation lies in the nature of modern catalog operations. Catalogers have developed a universally successful method of operating. In theory, catalogs could be personalized, with Arthur Hughes getting a
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catalog containing things that the sender assumes he would be interested in, and Helena Hughes getting a catalog from the same company with a different selection of products. Several catalogers have tried this. It is technically possible. However, the increase in sales was disappointing. Personalization of catalogs is expensive, and so few catalogers do it because the increased sales from personalization are not suf cient to cover the cost of personalization. Catalogers print 500,000 or more identical copies, trying to get the per-piece cost as low as possible. They mail these catalogs to their house le plus hundreds of thousands of rented names. This method keeps the marketing costs to a minimum.
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There is a form of personalization for catalogers, however. Most catalogers produce 10 to 15 different books per year. One cataloger, for instance, may produce some books featuring dress clothes, some with sports clothes, and some with children s clothes. If a customer buys children s clothes, she will get the children s clothes catalogs. This sounds like personalization. But herein lies a problem: The catalog s house le of previous buyers is often very small relative to the rented list of external names. Previous buyers are always the best responders. Why leave a previous buyer out of the sports clothing catalog mailing just because all she has bought before was children s clothes It does not make economic sense. So previous buyers will get all the catalogs. Where does database marketing gure in that If you cannot personalize your communications, you cannot really do database marketing, so few catalogers spend any money on database marketing. That is, they didn t until the advent of the Web.
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