Secrets of the Catalog Master
Vol. MMVI No. 2 April 2006
(Continued--page 4)
Essentials to Circulation Management
by Don Libey
A number of fundamentals are not being observed in many direct marketing companies. I want to review several that collectively can drop five percent out of prospecting and customer file performance.
While these fundamental principles of circulation management may seem obvious to many, I am seeing instances where the focus on web marketing and email in business-to-business is causing new circulation managers to lose sight of the basics of catalog and direct mail technique and practice.
1. Vendor Molding. You must ask the question, “Who is in charge, here?” Too many vendors, particularly data processors, have too many rules that favor their operations. When firm lists have to be submitted more than a month in advance of mailing dates, in some cases quoted recently, two-and-a-half months in advance, in order to meet mail dates, you are being molded to the convenience of the vendor. The necessity of flexible adjustments to lists must be adhered to by all business-to-business mailers. Being arbitrarily locked into inflexible patterns by vendors is anathema to optimal mailing performance. Today, we track hurricanes, fast reads on web tests, hotline segmentations, economics of regions and, increasingly, local response to advertising. If a data processor is not able to quickly respond and format a constantly shifting landscape of circulation factors, then you seriously need to find another vendor. Your circulation should not be molded to the convenience of the vendor; the vendor must mold to your needs.
2. Hotline Timing. The use of hotline names is a powerful stimulant to performance. The seasonality of certain markets, refreshment of updates to lists by other mailers, the usual and customary flow of prospect and house mailings within the larger business-to-business aggregate, industry characteristics, government contact characteristics and other factors all come together in a frenzied quarterly rush to obtain the most current names for ‘shortest-time’ mailing. Service providers over the past twenty years have been relentlessly reducing the time between the day when names are ‘put up’ and refreshed each quarter and the day of mailing those hot names to a matter of days rather than weeks. The result is measurably improved response, orders and sales. This has been tested and proven conclusively over the last twenty years and has been the ‘gold standard’ of circulation for circulation planning and administration for some time.
But when the company’s internal mail plan is out of synch with this powerful quarterly refreshment regimen and standard that is used near-universally by all seasoned and experienced circulation pros, havoc reigns. In some instances where monthly mailings are not the standard, mailers may schedule mailings at sixty or ninety day intervals. And, when those odd-ball intervals are off-synch with quarterly hotline refreshments, the names that are mailed may be six months old or even older. All the benefit and ‘juice’ of the expensive hotlines has been lost because your competitors have been there before you—months before you. There are actually many young (and quite a few experienced) circulation managers out there who don’t really understand this quarterly ballet of hotline names.
3. SIC Tagging. In business-to-business circulation, SIC code tagging is a fundamental basic practice. The concept is that we take business names and match them against known business databases to append the SIC code so that we can develop better targeted mailings and product offerings based on specific industry needs or behaviors. If you use only one source or one national database for appending SIC codes, you get x percent of the names coded. If you use two national databases for appending SIC codes, you get x plus percent of the names coded. Two sources are better than one source. Additionally, some national databases—specifically Dun & Bradstreet—are renowned for the quality and depth of the SIC code tagging in business-to-business, particularly manufacturing and related major groups.
If, however, you append unknown SIC names against D&B, perhaps Experian’s National Business Database and against MeritBase or an integrated marketing database, you may see as much as a twenty percent (or more) improvement in SIC code tagging performance. A solid regimen such as I have described should produce upwards of seventy percent positive SIC code tagging in a major business-to-business house file. My personal best was achievement of eighty-two percent, but it took diligence, tenacity, constancy and multiple matchings with top database companies like D&B.
4. Private, Integrated Databases. For multi-company multichannel groups, the advent of the private, integrated database is not a question of “If” but rather “How Quick.” It is a given that this is where it is all going. Building these powerful tools on a multi-company basis for those large conglomerates that are emerging in catalog and online marketing is becoming the gold-standard. They are expensive to build and expensive to properly maintain, but nothing is likely to produce as great a return on investment for the multichannel, business-to-business marketer as this technological advance. When you control the quality of the prospecting names, and draw from rich veins of proven performance data to create your own proprietary marketing fuel cell, you are super-charged for the future. Remember, there were people who said the Internet was a flash-in-the-pan and that Addressograph plates would never be replaced.
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The Libey Economic Outlook is published seven to eight times annually by MeritDirect. The information provided is published for information purposes only and does not constitute recommendations for investment or other financial activities. No guarantee of business performance is made or implied and readers are encouraged to seek adequate professional advice prior to making strategic and financial decisions or investments, or altering planned business activities. Copyright 2006 by Donald R. Libey. No reproduction or dissemination of this material by any means whatsoever, electronic or printed, is permitted without written consent of the author and publisher. Copyright infringements will be pursued to the full extent allowed by law. The Libey Economic Outlook is provided to clients of Libey Incorporated and its strategic partners and affiliates, MeritDirect, Amtower & Company, and SpyderHost, Inc.
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