Here are three examples of investments in the future.
- I want to tip my hat to Orvis for being a corporate sponsor of the VT/NH Marketing Group. Although the two state area is home to many catalogs, Orvis is one of the largest, and feels that it is part of their responsibility to the future of the industry to support the VT/NH Marketing Group. They also feel it is important to be “putting something back into the community”. They could leave it up to the printers, co-ops and companies like Datamann to support the group. But Orvis – a mailer and not a vendor – recognizes that they need to ensure there will be future marketers, with new and different skills from today’s “catalogers”.
- Simon Property Group, the nation’s largest mall developer, is investing venture funding into new retail concepts. Simon, which owns and operates 200 malls, had sales last year of almost $5 billion. In the past 15 months, they have funded 18 new start-up retailers, ranging from $250,000 to $5 million. The reason they are doing so is obvious – they are looking for future tenets in their malls, and are looking for new and innovative concepts. They are investing in their future.
- The little town of Groveton NH (population 1,100) has been suffering with chronic unemployment since their main employer – a paper mill – closed in 2007. This past March, residents voted at the their annual town meeting to borrow $400,000 to install public sewage and water lines in the hope that new businesses will locate there – and bring tax money and jobs. The $400,000 sum may not seem like much to some of you, but that is a huge sum, and a huge risk, for a tiny town only an hour’s drive from the Quebec border.
These are three examples of investments in the future – two by companies, one by a municipality – that we seldom encounter in the catalog arena. And I’m not talking about a printer or a co-op database investing in some new catalog start-up (which never happens anyway). I’m talking about your own internal investment, seeking new ways of operating your own business.
As you finalize your plans for Fall/Holiday 2016, what percentage of your marketing budget did you allocate to “new concept testing”? This doesn’t mean testing down to segment 12 of your favorite co-ops’ synergy model, or adding Facebook to your retargeting ads. This means testing the acquisition of new customers in an entirely new media, without aid of your catalog, such as putting a video link on your home page.
Here is an even better investment – have you done a holdout test yet on your house file to determine what percent of your customers order without aid of the catalog? Do you realize the potential profits that would fall to your bottom line if you could eliminate 25% of your catalog circulation, with a 5% loss in sales? Oh, I know, you don’t want to risk running that test because you need every dollar of sales you can get this year. But, holdout tests are the best investment in your future you can make.
I’m not looking for you to commit much to new concept testing. But would 10% be a reasonable amount to allocate to securing your future? Come on – test something new this year. You know there is no dearth of companies willing to take your money to test their new concept. Good luck.
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by Bill LaPierre
VP – Business Intelligence and Analytics
Datamann – 800-451-4263 x235