Smarthome Fine Tunes Prospecting, Title Selection
Smarthome, Irvine, CA, will mail about 14 million catalogs in 2004. The company's product selection includes the best-selling 4-Input Component Video Auto Switcher for $179.99 and the ToggleLinc Plus light dimmer for $44.99. It also sells automated pet-care products such as a heated water bowl, holiday-themed items such as a fog machine for Halloween and a large selection of home security products.
The company analyzed its catalog business last year and discovered that despite buying a significant number of prospecting names and sending to prospects with every mailing, its customer acquisition rate wasn't where it should be, said Matt Dean, executive vice president and general manager. Also, the new customers it acquired frequently were one-time-only buyers.
Another important piece of information gleaned from the spreadsheets was that several holiday-themed catalogs the company had mailed the year before did very well with current customers. Sales from Smarthome's Halloween catalog, in particular, have grown consistently since it was introduced five years ago, Dean said. That yearly growth has been driven mostly by current customers.
In response to these findings, Smarthome developed two strategies. One aimed to improve its prospecting, and the other sought to capitalize on the demand for additional automated products from current customers.
Smarthome's analysis also found that its gift catalogs did the best when it came to acquiring new customers. So this year, instead of including some prospecting in all of its catalog mailings, it prospected only with the gift catalog. All other catalogs are going to the house file only.
Smarthome's gift catalogs consist of gadgets such as a key finder and remote-control locator, a combination cooking fork and meat thermometer and a wireless keypad and mouse. The gift catalog mails four times yearly, for Valentine's Day, Mother's Day, Father's Day and the December holidays.
"Even though we reduced the mailings to prospects, we mailed to a lot more names," Dean said.
Smarthome acquires its prospects through Abacus.
The change in strategy has proven successful.
"We've seen the house file increase by 25 percent as a result of the prospecting effort and an aggressive keyword search campaign," he said.
Another strategy providing positive results is the introduction of two catalogs built around a narrower but deeper product selection, letting the company showcase some of the 5,000 products available on its site, www.smarthome.com, that were not previously found in one of its catalogs.
The first new catalog was a lighting book, which mailed in the spring. At 48 pages, it is smaller than Smarthome's usual 64- or 126-page books. It was sent to only 50,000 households, as opposed to the 250,000 names that most mailings go to. During the summer, the company sent a security catalog, which also came in at 48 pages and went to 50,000 names.
The lighting and security catalogs "did really well," said Dean, who added that the response rate was better than expected. Since the cost to produce them is much lower, Smarthome is exploring expanding the concept to other product lines such as gardening and pet care. Another lighting catalog is planned for spring '05 and likely will mail to more than 50,000 names.