Smaller Catalog Is Right Fit for Headsets.com's Budget

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Increasing sales and managing costs were prerequisites for Headsets.com Inc. in deciding to add a full-color, 48-page, business-to-business catalog to a marketing mix that has included solo mail pieces and the Internet during the three-year history of the firm.


Mike Faith, president/CEO of Headsets.com Inc., San Francisco, said that a per-piece postal cost of less than 25 cents for the 8 15/16-inch by 5 1/2-inch book is one reason it is successful.


"Due to the slowing economy, the end price for the catalog came in at about 15 percent under budget because of the print buys that are out there right now," he said. "We chose the format because of cost, and after testing a number of different dummy sizes ... this was the format that proved to be the best for us, taking into account printing, postage and the split test of dummy copies sent to 120 random people who evaluated them."


After recording about $3 million in sales last year, below the company's $3.5 million annual average, Faith projects sales of $5.5 million to $6 million next year. This year's projection is for $4 million in sales.


The company dropped 90,000 catalogs at the end of August. The house file received about 20,000 catalogs while the other 70,000 went to prospects. Faith said the results have exceeded expectations, though he would not offer details.


Future catalog production will depend on the final results of this initial effort.


"We're optimistic about it," he said. "But with [an expected office life of about 16 weeks], it's too early to jump to conclusions. Eight weeks in we'll do an analysis of revenues, margins, items sold and which industries bought which products, and then decide how to pursue it."


Headsets.com's catalog is producing approximately 40 percent of its orders through the company's online channel, 40 percent via its inbound call center, and 20 percent through the mail or fax. The company's call center has six agents.


Volume discounts are part of the strategy.


"A volume order is 10 headsets or more, but we're often quoting orders for 50, 100 and 200," Faith said. "Volume discounts depend on the product and payment terms."


The company will augment initial sales with secondary solo mailings aimed at "getting the customer back into the book."


One expense that was not limited was photography. Shaun Masterman, the director of database marketing who coordinated the catalog's production during an eight-week period, brought in a photographer from England who provided half of the catalog's images. Manufacturers supplied the other half.


Corded headsets are featured on pages 4 to 31 while wireless (pages 32-36), cellular (pages 37-38) and PC headsets (pages 39-45) are located toward the back of the book. Page 46 features a corded headset comparison chart.


"Our main target is office users, so PC and cellular represent a very small portion of our revenues," Faith said. "Wireless and desktop headsets represent the major portion of our revenues."


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