Perhaps it’s the nostalgia of receiving the Sears holiday catalog or the ability to browse at our convenience and in the comfort of our homes for items from L.L. Bean, Victoria’s Secret, Lillian Vernon or Crate & Barrel. Whatever it is, catalogs remain an important tool for selling clothes, home goods and other products to consumers and businesses. Despite many companies shifting business online, catalogs are not going away. According to a Vertis survey, consumers are more likely to respond to direct mail campaigns this year than they did in 2001.
Yet marketers must continually justify their efforts, especially with the current economy. Key to any catalog’s success is ensuring that it reaches the right person in the first place. Catalog marketing campaigns can only be as successful as the number of mail pieces that actually reach target customers and prospects.
It may be even more important for catalog marketers to maximize the power of their lists than for marketers in other industries. Catalog marketers must ensure that addresses on file will reach the appropriate audience, get merchandise to the customer, deliver billing statements in a timely manner and allow follow-up with promotional materials. Catalogs cost more than other mail pieces, and mistakes in names and addresses are expensive.
However, moves, name changes and mistakes on address fields are a fact of life. On average, companies mail to a bad address four times before it is corrected – a costly process.
Updating returned mail in-house can be expensive due to salary and training costs. This process is time consuming and prone to human error, especially given that returned catalogs and direct mail pieces often are cluttered with notes, smudges or stickers that take time to decipher.
The costs of undeliverable mail mount quickly and spill out into wasted materials, unnecessary postage fees, labor costs and time. These costs cut into marketing and company budgets, remove additional revenue potential and directly affect a company’s marketing campaign. When returned mail involves invoices or merchandise, companies can lose even more: current revenue and customers.
Since 1998, increased use of list cleanup or hygiene services has helped reduce returned mail pieces and catalogs. The National Change of Address is one such service. By using updates from people and businesses that indicated to the U.S. Postal Service they are moving, marketers can compare their address lists with those from the NCOA move database. The NCOA database covers 48 months and is updated quarterly. But for many marketers this is not frequent enough. Even with NCOA and other cleanup technologies, 3 percent of all mail is still returned.
The USPS also offers a cleanup service that can be used after the mailing goes out, known as Address Change Service. Using ACS, the postal service provides change of address information electronically and in hard copy. The benefits include savings realized by receiving address change information to update addresses for customers who have moved.
However, ACS can be expensive: 20 cents for electronic updates and 70 cents for manual notices. Marketers also are required to add extra address block elements such as a mailer identification (participant) code assigned by the National Customer Support Center and an optional Keyline code.
Part of the growth of UAA mail can be attributed to mandates for government agencies to protect individual privacy. In particular, the USPS is restricted from exposing address data to industry in a way that allows the creation or exploitation of individuals’ addresses. A possible solution is in the works, however, so expect to hear more about this.
Though ACS can be effective for catalog marketers, it is still costly. Companies can improve accuracy in their lists at lower costs by better using information from returned catalogs and applying advanced recognition to capture incorrect names and addresses automatically.
Until recently, automated solutions that capture information from mail had limited recognition capabilities and relied on additional manual verification processes, making them time consuming and costly. But these technologies have made strides to automatically read information from paper forms and transfer it into electronic data, helping marketers capitalize on the information already at their fingertips.
Since many catalog companies mail to large volumes of potential customers, they may choose to employ these technologies in-house to recognize information themselves. Others rely on service bureaus. Regardless, it is important to note that technology can be used to ensure that customer and USPS data maximize the power of mailings.
For example, new advanced automation technologies combine multiple recognition engines – Optical Character Recognition, Intelligent Character Recognition and Natural Handwriting Recognition – to recognize all character types including cursive, handprint and machine print. Because return address information can be presented in multiple formats, character recognition technologies need to handle all possible writing styles to make the best use of this information.
These new technologies are more versatile and can read an address wherever it appears on a catalog, card or package label. This is crucial because change of address information provided by the postal service may reside almost anywhere on returned mail.
Advanced automatic character recognition technologies apply business rules before and after recognition for more powerful processing and accurate information. A city may be automatically filled in after the ZIP code is recognized, speeding the process and removing room for interpretation. This ensures that the city, state and ZIP code match each time.
New technologies also use multiple recognition techniques for increased accuracy. These compare a catalog company’s addresses with an updated database from the USPS. They use whole-word and whole-phrase recognition versus simply reading each character individually. They let catalog companies assign confidence values to pertinent fields, such as the street number, to enable questionable text to be flagged for a keyer to review. In this way, keyers can be used for higher-level tasks of verifying questionable information or for other more important, revenue-generating activities. All of these measures provide more accurate information and effective mailings for catalog marketers.
With the growing need to justify ROI and effectiveness of mailing campaigns, especially with large catalog mailings, marketers need to be aware of the power of the data being put to work for them and how it can be improved. As e-mail and online marketing come closer to surpassing catalog sales, catalog marketers need to be even more meticulous about enhancing data quality as a way to lower mailing costs and increase campaign effectiveness.
In addition to looking at conversion rates, catalog marketers should ask the following to improve the success of their efforts:
* How many returns am I getting?
* What are my returns as a percentage of the mailing sent out?
* What is the cost of the returns – catalog, postage, remailing?
Catalog marketers should assess processes for updating mail information and the quality of data being entered.
Clean data helps catalog marketers improve deliverability, acquire new customers more quickly and efficiently, reduce time and expenses and effectively track marketing campaigns to determine ROI. Most importantly, it can help marketers make a lasting impression by showing how their efforts influence the bottom line. For these reasons, marketers should consider the best possible services to improve the value of their lists and mailing campaigns.
