Fighting the War on Postage
The rise in postal rates has taken a bite out of small and large catalog houses alike. But a number of catalog businesses are biting back. Some marketing tactics to offset the high cost of mailing:
Rue de France, a Newport, R.I., catalog house specializing in lace curtains, is sending out fewer catalogs -- even to its best customers and better prospects, says president Pamela Kelley. Kelley no longer sends more than one catalog to those who ask for it in response to an advertisement, even though "inquiries" are regarded as hot prospects. Instead, Rue de France sends just one catalog -- and two follow-up letters with special offers. It's more personal and more profitable, says Kelley. (See chart for a look at how many issues other catalog businesses mail. [Article link])
Calyx & Corolla, an $11-million mail-order flower business in San Francisco, has found alternatives to mass mailings. The company ran a promotion with Bloomingdale's for Mother's Day. The department store ran advertisements in the New York Times and the New Yorker ("Give Mother the Vase, and We'll Send Orchids"). Calyx & Corolla supplied the flowers. Both companies used the names of those who responded for a targeted mailing. Calyx CEO Ruth Owades says such joint promotions typically yield better response rates than cold mailings.
The Sharper Image, a high-tech-gadget catalog business in San Francisco, figures each duplicate name on its mailing list that's not caught by its computer is worth at least 10 bucks. So every person who calls the company to report receiving more than one catalog a month gets a $10 gift certificate. The company eliminates 1,000 to 1,500 duplicates a month that way. When you're mailing 2 million catalogs a month, it adds up.
Performance Bicycle, of Chapel Hill, N.C., slapped a large red "Last Catalog" sticker on its holiday issue, warning recipients that if they wanted to continue to receive the catalog, they had to become customers. To make it easier, the company also printed an 800 number for gift ideas on the cover of the catalog. The abrupt-warning tactic is helping Performance weed out everyone but the serious bike shoppers, says Burt O'Malley, head of marketing.
The Fox Valley Spring Co., a $1-million maker of industrial springs in Appleton, Wis., wanted to grease the wheels for its initial catalog mailing, so it first sent out a glossy postcard announcing, "A New Spring Company Has Sprung into Business." On the back was a written invitation to call for the company's catalog. The responses gave Fox Valley a targeted list for a more costly catalog mailing, and gave the company its first set of customers: 5% of those who received the postcard alone put in orders, and 10% of the postcard recipients called for the catalog. -- Susan Greco* * *