Watch Your 12-Month File, Forum Speakers Urge

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SAN FRANCISCO -- Direct marketing consultant George Ittner gave advice about 12-month files and branding to attendees yesterday at The Annual Catalog Conference at the Moscone Center here.


"We should be paying attention to metrics … particularly to the size of 12-month files," he told forum attendees.


Then he warned about listening to poor advice that can come from a CFO, owner, outside lender or board member.


"One of the things that happens in this business, sooner or later, to any catalog company is … somebody says, 'Cut back on your prospecting, just for a season or two, to protect the bottom line.


"And there starts a very difficult and vicious spiral of declining sales and cutting expenses that never get into sync, and a bigger problem emerges."


His admonition for the current environment: "Whatever you do, don't give up on your 12-month file."


Itner also noted the importance of the catalog brand.


"All of this talk about branding is spot on," he said. "We are what we sell. Those two things [12-month file, branding] will allow catalogs … to hang in and grow when we get to the other side of this trough."


Steve Lightman, president/CEO of Crosstown Traders, echoed Itner's thoughts.


"Our zero-to-12-month customer files are probably the most important asset any one of us have in our businesses," he said.


Lightman also addressed a question regarding the promotional environment.


"Probably for the first time in the history of our industry, as we went into the '02 holiday shopping season the retailers were pre-discounting before the holidays. The retailers were 40, 50 and 60 percent off right in front of us," he said. "To compete with them head on, we'll never win that game. The margins that they're willing to operate on and the giveaways are too great."


But incentives are an important component of Lightman's business model, and he said that they will increase in importance.


"The whole key to the discount methodology that we employ is that there's an event that the discount is for," he said. "Rather than turning customers into discount buyers … we try to inspire it with an event."


Such events can include opening a proprietary credit card and receiving free shipping and handling or 10 percent off.


"We go through a series of such mailings that we then track the test results to identify where we get the greatest response rates," he said. "We're very aware of not converting the zero-to-12-month file to discount buyers.


"You'll see us using them more as we go into '03 and '04, but [they'll be] more targeted."


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