Susan McKenzie, circulation director at window treatment catalog and Internet retailer Smith & Noble, discusses a new customer acquisition program.
Q: How does Smith & Noble tackle rising customer acquisition costs?
A: Every cataloger is facing challenges, as it gets more expensive to mail and to reach a unique audience. Recently, we were going to remail a catalog that had been dropped previously and try to reach new customers. Then, the Chicago Tribune’s sales arm, Tribune Media Net, approached us about its Direct Delivery-plus program, which delivers a mailer on top of the newspaper to home subscribers. We tested the program in July.
Q: What appealed to you about this program?
A: Tribune Media Net checked our customer file against theirs to find additional prospects who look like the folks that are already buying from us. Plus, with the same budget we were going to take to reach 800,000 with the catalog, we were able to reach 1.3 million. Finally, the visibility of being on top of the newspaper was great.
Q: How did this help cut costs?
A: We tested two different pieces of mail with this program: a fold-out mailer and a slim jim [letter size] catalog. They were dropped in the Chicago and Los Angeles markets, with the Los Angeles market producing better results than Chicago. This is in line with our typical results, because the brand has greater awareness in Los Angeles.
Q: Which version performed better?
A: There was no clear winner in terms of response between the fold-out piece and the slim jim. However, the fold-out had an overall cost of 34 cents per piece while the slim jim had an overall cost of 52 cents per piece. That is almost an 18-cent difference, which is significant. The fold-out would allow for greater reach because of the lower cost.
Q: What were some other results?
A: The program compared fairly well to a normal catalog mailing, with almost double the circulation and at a lower cost for the drop. We don’t think the topper would ever replace a catalog mailing, but it is a nice complement to one. We see the Direct Deliver-plus program as more of an acquisition strategy. We don’t want to invest the same dollars as we have reaching older buyers. Our repurchase rate is between three and seven years, which means we’re constantly looking for new eyeballs.