HOW CATALOGS DRIVE YOUR BUSINESS

Transcription

1 LETT Direct, Inc. 1 HOW CATALOGS DRIVE YOUR BUSINESS The Dingley Press Webinars Sheridan Group April 10, 2013 LETT DIRECT, INC. Catalogs Digital Marketing List Brokerage

2 LETT Direct, Inc. 2 LETT Direct, Inc. Incorporated in May, 1995 (18 Years in Business) Employee 15 Full-Time People Specialize in catalog circulation, execution, analysis, digital marketing and list brokerage 75% Catalog; 25% Digital Marketing Average Client Longevity is Over 10 Years Responsible for 90+ Million Annual Circulation Google AdWords Certified Partner LETT DIRECT, INC. Catalogs Digital Marketing List Brokerage

3 LETT Direct, Inc. 3 Agenda Understanding How the Catalog is The Driver Orders Through vs. From the Web The Importance of Match-Backs Buyers vs. Customers Web vs. Catalog HF Segmentation Effective Promotional Offers Test Results

4 LETT Direct, Inc. 4 How We Know Catalogs Are the Driver Match-Backs Catalog Mailings Spike Internet Traffic Contact Strategy Testing Reduction in Circulation Results in a Reduction in Sales

5 Catalogs Drive Web Traffic LETT Direct, Inc. 5

6 LETT Direct, Inc. 6 Understanding the Web Sales THROUGH the web Vs. Sales FROM the web

7 LETT Direct, Inc. 7 Prospecting Results After Match-Back QTY. ORDERS DEMAND ORDERS DEMAND MAILED BEFORE M-B BEFORE M-B AFTER M-B AFTER M-B 547,431 3,451 $231,726 7,277 $464, ,096 2,476 $162,350 3,824 $238, ,471 2,128 $144,241 2,995 $187, , $48,404 1,184 $72,373 TOTAL 1,367,666 8,829 $586,721 15,280 $963,006 Lift in Orders and Dollars 73.07% 64.13%

8 LETT Direct, Inc. 8 Affect of Match-Back to Prospects BEFORE MATCH-BACK AFTER MATCH-BACK QTY. RESPONSE RESPONSE MAILED AOV RATE RPC AOV RATE RPC 547,431 $ % $0.42 $ % $ ,096 $ % $0.46 $ % $ ,471 $ % $0.41 $ % $ ,668 $ % $0.41 $ % $0.62 TOTAL 1,367,666 $ % $0.43 $ % $0.70

9 LETT Direct, Inc. 9 Digital Channel - ROI Google Pay-Per-Click TOTALS: Revenue $121,603 Returns $3,648 Cost of Goods Sold $41,284 PPC Spend $21,265 Lett Fees (per week) $360 Contribution to Profit & Overhead $55,047 Contribution Percentage 47% Weekly Revenue Budget $113,860 Percent Variance 7% Cost Per Conversion $11 Spend to Revenue % 17%

10 LETT Direct, Inc. 10 Catalog Channel - BEP Actual Quantity Printed: 1,033,718 Quantity to be Mailed: 1,027,618 Quantity of Coop Prospect Names: 100,000 Quantity of Outside Rented Names: 96,000 BEP BEP ANALYSIS RATIOS Gross Sales $1,037, % Less: Returns & Allowances $0 0.00% Net Sales $1,037, % Less: Cost of Goods Sold $394, % Gross Profit $642, % Less Direct Selling Expenses: 1). Catalog Creative $0.020 $20, % 2). Printing and Paper $0.220 $227, % 3). Postage $0.320 $330, % 4). Rented Lists - Databases $0.070 $7, % 5). Rented Lists - Outside Lists $0.110 $10, % 6). Merge/Purge $0.015 $15, % 7). Ink-Jet & Bar coding & Mailing Service $0.020 $20, % 8). Misc. $0.010 $10, % Total - Direct Selling Expenses $0.622 $642, % Contribution $0 0.00% Order Forecast 14,815 $70.00 Revenue Per Catalog $1.00 $1.00

11 Catalog & Internet as One LETT Direct, Inc. 11

12 How Consumers Order LETT Direct, Inc. 12

13 LETT Direct, Inc. 13 Contact Strategy Test Drop Drop Drop Frozen Panel Panel A Y Y Y Panel B Y N Y Panel C Y N N Panel D N N N SAMPLE SIZE: 20M Customers per Test Panel

14 LETT Direct, Inc. 14 Contact Strategy Test Results 3X 2X 1X NO MAILINGS Total Total Total Total Circulation 60,000 40,000 20,000 20,000 Orders 1, RR 1.98% 2.21% 2.62% 0.00% AOV $ $ $ $ Demand $146,210 $109,464 $66,679 $31,410 Net After Return/Cancel $143,285 $107,275 $65,345 $30,782 Margin $85,971 $64,365 $39,207 $18,469 Cost in the Mail $39,000 $26,000 $13,000 $0 BEP = $1.11 Results are based on 4 Nth panels frozen at the beginning of the season and mailed based on The contact pattern shown. Panels were treated equally with regard to all other points of contact Such as campaigns. Demand is total demand for each panel for the entire season.

15 LETT Direct, Inc. 15 Buyer vs. Customer BUYER Someone who purchases once. CUSTOMER Someone who purchases two and more times.

16 LETT Direct, Inc. 16 One-Time Only Buyers Web vs. Catalog QTY. ORDERS REVENUE RESP. MAILED AFTER MB AFTER MB AOV RATE RPC 0-12 Web Only 1X Buyers 26, $27,032 $ % $ Catalog 1X Buyers 16, $34,863 $ % $2.12

17 LETT Direct, Inc Month Web vs. Catalog Buyers QTY. ORDERS REVENUE RESPONSE MAILED AFTER MB AFTER MB AOV RATE RPC 0-12 Web Only Buyers 37, $47,753 $ % $ Catalog Buyers 53,773 2,604 $174,235 $ % $3.24

18 LETT Direct, Inc. 18 Driving Orders to the Web FREE SHIPPING WHEN ORDERING ON-LINE QTY. ORDERS REVENUE RESP. MAILED AFTER MB AFTER MB AOV RATE RPC Total Buyers 161,843 5,753 $385,825 $ % $2.38 Total Inquiries 23, $28,137 $ % $1.20 Total Databases 273,716 3,639 $232,434 $ % $0.85 Total Rentals 39, $28,152 $ % $0.72 Total From Offer 498,253 10,249 $674,548 $ % $1.35 CONTROL - NO OFFER Total Buyers 161,843 4,939 $308,660 $ % $1.91 Total Inquiries 23, $6,472 $ % $0.28 Total Databases 273,716 2,783 $172,001 $ % $0.63 Total Rentals 39, $21,114 $ % $0.54 Total Control - No Offer 498,253 8,150 $508,247 $ % $1.02

19 LETT Direct, Inc. 19 Most Effective Offers Free or Flat Shipping Dollar Amount Off Percentage Off Free Gift

20 LETT Direct, Inc. 20 Offer Considerations No Dollar Threshold Order Minimum Will Generally: Increase the Average Order Size Increase the Response Rate Higher RPC (Revenue Per Catalog)

21 Tiered Offers LETT Direct, Inc. 21

22 Conversion Path Length LETT Direct, Inc. 22

23 Top Conversion Paths LETT Direct, Inc. 23

24 Demand Orders LETT Direct, Inc. 24 Affect of Mailings on I-net Orders $350,000 Catalog Mailings vs. Internet Activity Demand Orders 6,000 $300,000 5,000 $250,000 4,000 $200,000 3,000 $150,000 $100,000 2,000 $50,000 1,000 $0 0

25 LETT Direct, Inc. 25 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers.

26 LETT Direct, Inc. 26 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers. House File Retention Maintain regular contact with customers.

27 LETT Direct, Inc. 27 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers. House File Retention Maintain regular contact with customers. Reactivation Catalogs are used effectively to reactivate older buyers.

28 LETT Direct, Inc. 28 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers. House File Retention Maintain regular contact with customers. Reactivation Catalogs are used effectively to reactivate older buyers. Life-Time-Value Catalogs help solidify and extend the L-T-V of the customer.

29 LETT Direct, Inc. 29 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers. House File Retention Maintain regular contact with customers. Reactivation Catalogs are used effectively to reactivate older buyers. Life-Time-Value Catalogs help solidify and extend the L-T-V of the customer. Addresses Mailing catalogs helps build an database.

30 LETT Direct, Inc. 30 Importance of Catalogs Prospecting Reaching qualified & proven catalog buyers. House File Retention Maintain regular contact with customers. Reactivation Catalogs are used effectively to reactivate older buyers. Life-Time-Value Catalogs help solidify and extend the L-T-V of the customer. Addresses Mailing catalogs helps build an database. Catalogs - drive demand!

31 LETT Direct, Inc. 31 Thank You LETT DIRECT, INC. Catalogs Digital Marketing List Brokerage QUESTIONS PLEASE