Secrets of the Catalog Master
Vol. MMVII No. 3 May 2007
(Continued--page 2)
The Third Quarter 2007 Economic Outlook
The late April corporate earnings are robust and the stock market is at an all-time historic high. Money is being spent and investments are being made. Banks are consolidating. Private equity groups continue to buy. Strategic buyers are active. This is no time to either pull back or to get crazy. Steady and consistent takes the prize.
There are indications for a further slowing in the economy in the last half; some are predicting economic growth at 2.0 percent. Time will tell. It hinges on the housing market.
My concern is less economic than it is political. There is a growing political angst that could have implications. The global markets and the global political climate either diverge or come together. The outcome will have a business effect.
Oil has once again become problematic. Expect increased costs based on the rising oil prices through the summer and likely beyond. We may have finally reached a whole new $3 a gallon base for the U.S. It’s taken about 18 years to move us from $.69 a gallon gas to $3.00 a gallon, but it has worked and it may well be the new constant.
I continue to see a relatively strong economy, but one that is slowing. The manufacturing outlook is mixed, and the increased defense spending maintains stability. The outlook is a 2.5 on a 1 to 4 scale with 4 being robust and positive.
Manage your business for moderate growth; continue to invest in new customer acquisition; focus on new products and merchandising; control costs; and stop any and all leaks that are dripping money away from earnings.
Signs of Regional Stability or Status Quo
Region One (CT, ME, MA, NH, RI, VT)
Region Two (NY, NJ, CT, PR, VI)
Region Four (OH, KY, PA, WV)
Region Six (GA, AL, FL, LA, MS, TN)
Region Seven (IL, IN, MI, WI, IA)
Region Eight (MO, IL, IN, KY, TN, LA, AR)
Region Nine (MN, WI, ND, SD, MT, MI)
Region Ten (KS, CO, MO, NE, NM, OK, WY)
Region Eleven (TX, LA, NM)
Region Twelve (CA, UT, AZ, NM, OR, WA)
Slower (Individual states)
Region Three (PA, NJ, DE)
Region Five (KY, MD, TN, VA, NC, SC)
Louisiana
Mississippi
The Third Quarter 2007
Circulation and Prospecting Outlook and Recommendations
Synopsis
The short-term economic outlook for the catalog industry remains positive. The intermediate-term outlook remains positive for the third quarter of 2007 and the long-term outlook through 2007 remains positive.
Prospect as an Investment
For the second half planning in 2007, even with the signs of second half slowdown in the economy and in overall business, maintain normal to increased strategies for circulation and investment prospecting plans, likely not more than 10 to 15 percent. There are firming signs that the economy is likely to slow but there are no indications or good reasons for reductions in either prospecting or customer circulation, or both, in the last half of the year; businesses and consumers are still spending money. We would remain comfortable with modest increases in prospecting levels, even with the postage increase this month.
Nation At A Glance
We are adamantly continuing our mailing recommendations for third and fourth quarter planning in 2007. In every instance, we caution against decreasing prospecting or customer mailings except for normal hygiene and mailing frequency improvements. Do not be deterred by the postage increase and fall into the trap of reducing mailings; the end result is always a diminished performance.
| State |
Mailings |
|
|
| Alabama |
Normal |
| Alaska |
Normal |
| Arizona |
Increase |
| Arkansas |
Normal |
| California |
Increase |
| Colorado |
Increase |
| Connecticut |
Increase |
| Connecticut-Fairfield |
Increase |
| Delaware |
Increase |
| District
of Columbia |
Normal |
| Florida |
Normal |
| Georgia |
Normal |
| Hawaii |
Normal |
| Idaho |
Increase |
| Illinois—North |
Increase |
| Illinois—South |
Normal |
| Indiana—North |
Normal |
| Indiana—South |
Normal |
| Iowa |
Increase |
| Kansas |
Increase |
| Kentucky—East |
Normal |
| Kentucky—West |
Normal |
| Louisiana—North |
Evaluate locally |
| Louisiana—South |
Evaluate locally |
| Maine |
Normal |
| Maryland |
Increase |
| Massachusetts |
Increase |
| Michigan |
Normal |
| Michigan—Up.
Pen. |
Normal |
| Minnesota |
Increase |
| Mississippi—North |
Evaluate locally |
| Mississippi--South |
Evaluate locally |
| Missouri—North |
Normal |
| Missouri—South |
Normal |
| Montana |
Normal |
| Nebraska |
Increase |
| Nevada |
Increase |
| New
Hampshire |
Increase |
| New
Jersey—North |
Increase |
| New
Jersey-South |
Increase |
| New
Mexico—East |
Normal |
| New
Mexico—West |
Normal |
| New
York |
Normal |
| North
Carolina |
Increase |
| North
Dakota |
Increase |
| Ohio |
Increase |
| Oklahoma |
Normal |
| Oregon |
Increase |
| Pennsylvania—East |
Increase |
| Pennsylvania—West |
Increase |
| Puerto
Rico |
Normal |
| Rhode
Island |
Increase |
| South
Carolina |
Increase |
| South
Dakota |
Increase |
| Tennessee—East |
Normal |
| Tennessee—West |
Normal |
| Texas |
Increase |
| Utah |
Normal |
| Vermont |
Increase |
| Virgin
Islands |
Normal |
| Virginia |
Normal |
| Washington |
Increase |
| West
Virginia-East |
Normal |
| West
Virginia-West |
Normal |
| Wisconsin—North |
Increase |
| Wisconsin—South |
Increase |
| Wyoming |
Increase |
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