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April 25, 2013

Catalog Marketing: Still a Winner in Your Marketing Mix

Welcome!

Catalog Marketing: Still a Winner in Your Marketing Mix

Sponsored by:

Learn more about Agile at www.agile-ed.com

Introduction of Presenters Rafael Mendez, Dir. Business Development & Campaign Strategy, Evan-Moor Educational Publishers

Rafael oversees all of Evan-Moor’s campaign strategies, which include directing ecommerce, direct mail and e-mail marketing. In this role, Rafael has been instrumental in expanding Evan-Moor’s customer outreach and profitability. Mendez joined Evan-Moor in 2007, bringing a decade of strategic marketing experience. He earned his BA in international studies and MBA in management. 

Introduction of Presenters Tim Ridgway, Vice President, Marketing, Califone International, Inc.

Tim oversees marketing for Califone, including catalogs, website, social media, tradeshows, PR, advertising, B2B and B2C support. He spent the previous 10 years at Remo, the leading global drumhead and percussion manufacturer; where he managed its media and public relations. He holds a Bachelor of Science degree in Economics from the University of California at Irvine.  

Introduction of Presenters Mark Skup, Senior Vice President, O’Keefe Henry Direct, Inc.

With O’Keefe Henry Direct, Mark Skup has been helping small to mid-sized catalog companies for the last 15 years.  Mark’s entire career has been in the Direct Marketing and Catalog industry.  Prior to O’Keefe Henry Direct he held senior level marketing positions with some of the largest and most sophisticated mailers in the country such as The Signature Group, Bradford Exchange, and Garden Way/Troy-Bilt.

CATALOG CHALLENGES AND MEASURING PERFORMANCE

Rafael Mendez and Mark Skup

Poll #1

Do you sell to:o Individual Teacherso Schools/Districtso Both

Poll #2

Do you accept purchase orders?o Yeso No

5 Catalog Challenges in our Market

1. Determining who to mail to when each of our customers may have multiple participants in the purchase cycle. Data may be limiting.

Customer Participant Rev. Per Piece

Washington Elem.

End User $0.80

Influencer $3.50

Purchase Approver $6.00

Buyer $10.00

5 Catalog Challenges in our Market

2. Measuring performance and making data-driven decisions is difficult! Sometimes we need to make assumptions.

Catalog Sent Order ReceivedMail To Bill To Ship ToRafael Mendez Bill Evans Evan-Moor  Evan-Moor Attn: Rafael Mendez123 Main 18 Lower Ragsdale 18 Lower RagsdaleMonterey, CA 93940 Monterey, CA 93940 Monterey, CA 93940

Are you able to match this catalog recipient to the order?

Example #1

5 Catalog Challenges in our Market

2. Measuring performance and making data-driven decisions is difficult! Sometimes we need to make assumptions.

Catalog Sent Order ReceivedMail To Bill To Ship ToRafael Mendez Bill Evans Rafael Mendez

Evan-Moor Evan-Moor18 Lower Ragsdale 18 Lower Ragsdale 18 Lower RagsdaleMonterey, CA 93940 Monterey, CA 93940 Monterey, CA 93940

Does matching at the Ship To level make sense for your business.

Example #2

5 Catalog Challenges in our Market

2. Measuring performance and making data-driven decisions is difficult! Sometimes we need to make assumptions.

Catalog Sent Order ReceivedMail To Bill To Ship ToRafael Mendez Bill Evans Bill Evans

Evan-Moor Evan-Moor18 Lower Ragsdale 18 Lower Ragsdale 18 Lower RagsdaleMonterey, CA 93940 Monterey, CA 93940 Monterey, CA 93940

Does matching at only the address level make sense for your business.

Example #3

5 Catalog Challenges in our Market

3. Increasing catalog costs

As costs increase, so must your catalog revenue to maintain catalog performance!

Its not enough to simply:• Increase budgets• Reduce mail volume

You need to:• Manage expense increases with response growth• Decrease expenses while maintaining response

5 Catalog Challenges in our Market

4. Decreasing catalog conversion rateso DMA has noted a 25% decrease in catalog

response rates between 2003 and 2011o There has been an explosion of response

mediums in the past decade, including online advertising and social media

The catalog still produces the majority of campaign generated revenue for Evan-Moor.

5 Catalog Challenges in our Market

5. School-market order curveo The longer your purchase cycle and the

more campaigns you deploy, the more difficult it is to measure performance

Determining the right mix

1. Where to invest? (catalogs, email, social media, PPC, etc.)

o Utilize profitability metrics like profit per order across all direct mediums

o Understand the penetration you can have with your campaigns

o The school market universe is easily accessible for use in direct mail!

Determining the right mix

2. Overall catalog volume and frequencyo Maximize your customer list using revenue

and profit per piece mailedIn-House Buyers Qty RPM PPM Total Rev Total Profit2012 Catalog 1000 $10 $6 $10,000 $6,000Total $10 $6 $10,000 $6,000

In-House Buyers Qty RPM PPM Total Rev Total Profit2013 Catalog 1 1000 $10 $6 $10,000 $6,0002013 Catalog 2 1000 $4 $2 $4,000 $2,000Total 2000 $7 $4 $14,000 $8,000

40% Increase

33% Increase

Determining the right mix

2. Overall catalog volume and frequencyo Establish a prospecting threshold by

determining an acquisition expense or Cost Per New Customer (CPNC) that your business can sustain

Measuring Performance – New Customer Acquisition Cost

Calculating New Customer Acquisition Cost

Qty Mld Ords RR% Demand $

Avg Ord

Cogs/Var Fulf (50%)

MrktCost ($.65)

Net Cont $

CPNC

100,000 1,000 1.0% $75,000 $75 $37,500 $65,000 ($27,500) $27.50

Measuring Performance – Estimating Lifetime Value

Use existing data from 0-12 month buyer segments

Qty Mld

Ords RR% Demand $

Avg Ord

Cogs/Var Fulf (50%)

MrktCost ($.55)

Net Cont $

PPM

25,000 2,500 10.0% $187,500 $75 $93,750 $13,750 $80,000 $3.20

Measuring Performance – Balance Between CPNC and PPM

o Cost Per New Customer = $27.50

o Profit Per Piece Mailed = $3.20

o Payback on new customer acquisition cost in 8-9 mailings

REACHING AND ENGAGING YOUR AUDIENCE

Tim Ridgway

B2B

• How to reach your audience?• Increasing number of

competing channels• Print vs digital? • Consider an alternate filter of

complementary channels

Califone Catalog Distribution

• Push & Pull• Print run includes

B2B catalogs with custom front and rear covers

Competition to Catalog

• Paper is no longer the sole source of information

• Online information continues to grow

• Is digital’s growth sustainable?

Growth of Digital

• Drop in traditional PCs• Rise in mobile devices• Today, half of total US pop. uses a mobile device• Mobile media users in US grew 19% to 116 million over PY

Mobile

Social Media

What’s missing?bit.ly/ZxogK9

Expand Your 2-Dimensional Catalog

How ? QR Codes!

• What are they? • How are they used?

A QR code can link to a website, a phone number, video, a blog or a podcast

Kaywa

Microsoft

QR Codes

bit.ly/jn0vsY

Expand Your 2-Dimensional Catalog

bit.ly/17JEsM1

Expand Your 2-Dimensional Catalog

• 51 QR codes used in the 2013 Califone catalog

• 1st QR Code Contest at Infocomm , 2011. Read more by clicking to

bit.ly/lX1L49

Expand Your 2-Dimensional Catalog

• Post your catalog online• Use of catalog for online SEO benefits (the

process of improving the quantity or volume of traffic to a website from search engines from natural or unpaid (“Organic”) search results

• http://www.califone.com/catalog/catalog2013.php can post with ads or without , faster download than a PDF – easier to access

Expand Your 2-Dimensional Catalog

http://www.califone.com/download_center.phpbit.ly/13wcLqg

How do Users find Websites

• Directly by knowing your audience• Links• Organic searches

• 85% of all Internet traffic is referred to by search engines

• 90% of all users don’t look past the first 30 results (most only view the top 10)

How do they find your site?

Learn why Google’s algorithm is so important

bit.ly/Zilw4S

Keywords

• Approximately 15% of algorithm• Content must be in HTML text format• Images and other non-text content is virtually

invisible to search engines

• Learn more about the changes http://mz.cm/KYkW0I

Wrap Up

• Print and digital work together. Read bit.ly/15mhRpu for more info

• With increased mobile uses, opportunity to integrate catalog is huge

• Mix with other marketing components• Use of readily accessed information in

catalog to quickly take a reader to another source for more information by using bit.ly or QR codes

Conclusion

• Califone is bullish on catalog mailing• Currently sending 10x more than in 2003• Single largest annual budget item• To optimize today’s catalogs we must

incorporate other modalities in our tool belt

Questions?

Send them Using the Questions Panel