Managing Rising Distribution Costs

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The benefits of controlling mailing costs include an easier, more manageable production and circulation process; better results reporting; and an improved, more consistent catalog. And you have more control over costs than you think.


Being close to the components of the mailing in many situations also means defining process and assigning accountability. Clear goals and objectives for each area will help all of your key players do the best job possible.


Beginning with the catalog creative process, define what is best for your business: one-stop shopping, in-house or a combination in which someone in-house directs and manages the services of outside providers. Look at your options, their costs and then establish long-term relationships that will benefit you.


Next, when was the last time you evaluated your printing process? The old rules don't apply any more to the gravure vs. offset question. At the National Wildlife Federation, the change from offset to gravure for the body of the book represented significant savings. We added pages to the catalog and increased buying opportunities for the customer. This change required that we rethink testing and versioning and limit testing to those with potential to affect sales significantly.


Don't let your testing program run away from you. Outline an annual budget for testing with complete costs for each test clearly defined and make sure that you have explored other vehicles of communication with your customer: ink-jet messaging, demo binding and cover changes.


Printing, paper and mailing costs make up most of our cost-in-the-mail. When you evaluate your bids, be sure to do a complete comparative analysis, including freight costs, postage, paper consumption and list-processing fees. If you have not worked with the printer before, ask for a sample mailing tape to be processed for your review. Looking at a print bid without including the freight and postage information can be misleading. It's also advisable to have long-term relationships in the print area. I'm told that press time for the fall and holiday season already is sold out in some plants.


The paper situation has been a thorn in our sides for the past couple of years. It's good to develop a long-term purchasing strategy. Explore possible rebates, discounts on terms, self-purchase vs. printer purchase and establish long-term commitments, but know when it is better to buy "spot" vs. future.


Take a look at your catalog, is it possible to alter the grade or weight of your paper? Two of our executives favored crisp, detailed depiction of product on a white sheet as opposed to less-detailed depiction generated by groundwood paper. We tested and, to our surprise, customer response increased with groundwood. Testing a second time validated the results. We're saving money and we're helping the environment by using paper that requires less processing, an important part of our mission.


Take into consideration any impact on the postal aspect in your decision as well. Is there an alternate trim size that would use paper more efficiently? Have you taken a look at your order form lately? Is there a more press-efficient trim size that may benefit you here as well?


Also look at:


List hygiene: The integrity of your customer file will assist you by eliminating potential duplicates and possible unwanted mailings. You should be performing the standard list hygiene procedures and making sure that as much of your mailing as possible can be ZIP+4 barcoded. But do you incorporate information about address standardization in your order entry training program? How about the importance of the customer number? It's not only a convenience but also a method by which we monitor a customer's relationship.


Acquisition mailings: Evaluate your list rentals and exchanges. Are you getting the best possible discounts? Have your list broker provide you with NCOA information on list recommendations so you can avoid the expense of processing a list that has recently been NCOA'd.


Take the time to train and inform your telemarketing staff. The better informed your employees are, the more likely they are to be attentive to detail and question uncertainties. Some of the software packages that interface with order entry to verify address information also are helpful.


So, you offer customers an opt-out option, you have used the DMA's Mail Preference list as a suppression in your merge and have targeted your mailing as best you can, what else? Have you tried using Add-a-name? This program evaluates your mailing tape, finds those carrier routes with only nine or eight mail pieces defined in your tape and goes out to a pool of names to seek the ones to complete that carrier route. Then all 10 pieces travel at the carrier route postage rate.


Some organizations have their own pool of names, perhaps a membership file or a publication list, others may choose to use older names they are not planning on mailing. Some participatory databases also provide add-a-name services, and you can incorporate this into your acquisition strategy and mail these books at very reduced cost. The overall cost per piece of your mailing is reduced, you have better delivery because of the increased carrier route, and you almost always will come out ahead.


The common thread here is planning. Outline your plans ahead of time and make long-term commitments with service providers. Look at all aspects of your catalog program costs and periodically question what you do and how you do it. You have more power than you think. Use it well and you'll reap the results quickly.


Susan C. Boghosian is senior director of marketing at the National Wildlife Federation Catalog, Washington.
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