E-Marketing for Traditional Catalogers

Even though most traditional catalogers are behind the curve transitioning to e-marketing, they still have a great advantage over dot-com companies and can strike at a moment’s notice when it comes to integrating their entire marketing mix for a stronger customer experience.

The real challenge for these traditional catalogers is to overcome the mind-set that e-marketing is just “Internet mass marketing” and use available Internet technologies to become profitable online.

Unlike dot-com companies, traditional catalogers have an established distribution base and are poised to integrate all potential marketing channels to reach the customers exactly how they prefer: traditional marketing via television, print and radio; catalogs; and online methods via the Web and e-mail. Depending on the target audience, some may be more comfortable with one method over another — some may prefer e-mail, others mainly respond to television.

The trick is harmonizing all facets of this marketing mix, thus providing stronger cross-messaging and a literal smorgasbord of how customers prefer to be reached. Concentrating on one marketing medium and excluding others isn’t enough to reach all customers.

Although e-mail is the most cost-effective form of communication, especially for customer retention, it will probably never completely replace the customer-acquisition effectiveness of television.

Companies need to integrate their entire marketing mix to find the utopia of customer acquisition and retention by combining the three marketing areas. A balanced mix allows customers easy purchasing entry or re-entry.

Traditional catalogers must act to decrease communication costs and improve profitability by creating a desire in customers to make the transition to permissive e-mail.

For example, some catalogers entice customers with something valuable to migrate their catalog subscription to e-mail — e.g., sweepstakes, giveaways, coupons, time savings, etc. Since traditional catalogers already have easy access to their target audience, these companies can easily promote their online efforts in existing catalogs free of charge.

Even if half a subscriber base chooses e-mail communication, imagine the cost savings when dealing with millions of subscribers — a savings of more than $1 per customer per campaign and hundreds of dollars each year. These savings could be used as enticement coupons, giveaways, etc. Combine those savings with e-mail's being a more effective means of customer retention — nine times more effective, according to Forrester Research, Cambridge, MA, and significant savings are instantly transferred to the bottom line.

Once customers are transitioned to e-mail, traditional catalogers must then change their catalog mind-set to use new e-marketing concepts for the highest profitability. As stated earlier, if used correctly, e-marketing is much more powerful than just Internet mass marketing. It provides a greater bidirectional flow of information than all other media because of the interactive, personal and selective one-to-one communication on a pinpointed basis, which was impossible on all other media before e-mail.

For example, if a pet store sends a message that has information about dogs, cats and fish and customers click on the cat section, e-mail allows the sender to instantly analyze what information those customers is interested in, based on where they clicked or didn’t click — down to the individual level. Following e-marketing concepts, the next time the pet store sends a message, it will know to send information on just cats to cat lovers, fish information to fish enthusiasts and so forth.

After a few iterations, these permissive messages become pinpointed so customers receive only the information they are interested in: Persian cats; pet stores in Manhattan; upcoming television shows on cats, etc. This is much different than mass marketing — this is micromarketing, or one-to-one marketing, with focused and pertinent information based on the recipient’s interests.

These e-marketing techniques enable companies to cultivate long-term customer relationships, with bidirectional flows of information. Some e-marketing providers enable live customer service within e-mails, point-and-click survey response capabilities, animation and links to Web sites. This mutually interactive communication further builds the customer dialogue by providing exactly what individual customers want and gets them to say, “Yes, I like the experience you give me.” This ongoing dialogue increases customers’ lifetime value because it provides more than just product information; it also provides pertinent and convenient information to their desktops — easy for customers, profitable for businesses.

One of our clients, Multiple Zones International, producers of the Mac Zone and PC Zone catalogs, felt so strongly that the Web was the best marketing medium, the company pursued an e-marketing strategy. While most traditional catalog companies are satisfied with 2 percent response rates, it means they have wasted 98 percent of the effort, which results in increased marketing costs and affects their profit and loss statements.

This ignorance — not knowing who will respond to the offer — can be mitigated if they use real-time analysis that e-mail provides to identify those people most receptive to the message, as well as their response to the message, which can be achieved with an immediate follow-up message pinpointing the appropriate targets.

Multiple Zones reviewed the detailed analysis not only to monitor sales but also to understand its customers to make its next campaign even more targeted toward customers’ individual preferences.

Instead of mass marketing and generating 2 percent response rates, the company used a micromarketing approach and generated an average of 20-times higher responses to pinpointed segments of its total audience. The company reduced its catalog dependency — from more than 50 million to fewer than 20 million — while maintaining sales goals and reducing sales, general and administrative costs.

This is just one example of how a traditional cataloger used its catalog legacy to build an e-mail contingency but did not completely abandon its traditional catalog efforts.

This comprehensive mix enhanced its customers’ experience with another form of choice and control via e-mail and enhanced its bottom line. Imagine your possibilities with migrating customers to e-mail.

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