Acorn Aims to Grow House File
Acorn Direct, which produces the Acorn catalog targeting Anglophiles and viewers of public television, looks to drive long-term expansion of its house file. The strategy prompted the decision to boost the number of books mailed this summer to 2.03 million from 1.32 million last year.
The number of 12-month buyers on the house file has ballooned to nearly 80,000 from 44,000 a year ago, said Miguel Penella, president of Acorn Direct, Silver Spring, MD, which markets video selections and general merchandise.
But while the book remains profitable and the summer response rate is projected to surpass 1.5 percent, overall response is still expected to fall 10 percent below last summer. Inactive names on the house file are weighing down its response rate, which should fall 15 percent.
"We plan to stop mailing the older segments of the file," Penella said. "We're starting to cut out some of them, such as some of the lower-price-point customers. And every year, we will cut out a few more of them. They had been profitable, but there are some segments among the older names that we are eliminating from our mail plan."
Acorn raised the average price per item by $10 from last year, to $65. Average order is $95, exceeding last summer's $90. "We've been adding more items in the $150-plus range," Penella said.
Penella deems the prospecting strategy aggressive.
"We have been successful in prospecting profitably, and we are expanding our prospecting universe with new lists. We're going deeper into lists we mailed last year," he said. "The drop in response rate is not a bad thing since we're expanding circulation and acquiring more names. It's to be expected. This is part of a long-term growth strategy."
Prospects got 80 percent of the books this summer, up from 75 percent. Names were obtained from 60 lists, up from 40 last summer.
"Since the start of the catalog, we have focused on cooperative databases. While those are still working and we are using more selects, now we are going more into individual outside lists," said Penella, whose company also mails spring, fall and holiday catalogs. "Also, to a certain extent, we are trying some B-type, second-tier lists."
Last summer's emphasis on video-oriented lists has been replaced with a greater use of general merchandise lists. New to this year's mix are the Levenger and Smithsonian catalogs along with Sovietski Collection and Restoration Hardware.
The first and last four pages in the 40-page book change for three summer drops. In-home dates are the first week of April, the first week of June and the second week of July. Along with page count, the target audience is unchanged: an even male-female split; average annual household income exceeding $75,000; and an average age older than 55.
"We are considering expanding the number of pages, but we would like to see a greater percentage of items become profitable," Penella said. "We would like it to be over two-thirds. It's close to it now."
Product density rose this year from 4.2 items per page to 4.6. General merchandise also increased to 40 percent from less than 35 percent.
Best sellers this season include the Florentine Wrap ($99) along with the Poirot Red and Poirot Silver, with each set priced at $69.95 in VHS.
Like last year, the Web and mailed-in order forms each are generating 20 percent of sales. The rest is produced via the toll-free number. Improvements for acornonline.com are on the drawing board.
"Our Web site needs to be revamped," he said. "It still looks like our catalog did three years ago. It's hard to find general merchandise titles. Eight of nine categories on the site relate to video, and only one relates to general merchandise. The age of our buyers could be part of why the percentage of sales generated by the site hasn't improved, but it needs to be more in line with what the catalog looks like today."