Preaching to the Non-converted

By relying simply on the contents of your mailbox, you might think the catalog industry is growing by leaps and bounds.

Not true.

Compound annual growth between 1993 and 1998 was 8%; it’s expected to drop to 6.4% from 1999 to 2003. And we’re actually losing ground when it comes to the percentage and number of buyers who shop by catalog (see chart at right).

Obviously, the industry isn’t offering consumers enough reasons to buy direct. We need to overcome non-buyers’ reluctance.

Awareness of this non-expanding universe motivated the Direct Marketing Association to try to help its members, and the industry, better understand just why the non-converted stayed that way year after year. Focus groups turned up some pretty critical attitudes.

See if your answers to these statements match what was discovered in the focus groups.

1. Shopping by catalog is convenient. True or false?

2. Catalogs provide the kind of service I need. True or false?

3. Catalogs are a cost-effective way to shop. True or false?

4. Catalogs are easy to shop from. True or false?

5. Catalogs are trustworthy. True or false?

6. Catalogs understand my wants and needs. True or false?

7. Credit card fraud due to phone ordering is a concern. True or false?

If you answered true to any of the above, you guessed wrong. Many traits the industry prides itself on are simply not registering with non-buyers. Remember that non-buyers fall into two categories: those who have never succumbed to DM’s charms and those who have tried shopping direct but didn’t like it.

Let’s look at some key issues the DMA research addresses and some potential solutions.

Problem No. 1

Shopping by catalog is not convenient.

Honestly, how wonderful is it when you get an item, hate it and have to return it? With most companies, the return information in the package is less than informative, as well as time-consuming and annoying to fill out. I love companies that say such customer-friendly things as “This form must be filled out completely and enclosed…or it will delay the processing of your return.” Very conducive to taking another chance on buying by catalog. We won’t get any positive word of mouth – which generates many, many new customers – with that kind of language.

Understand, too, that uninitiated catalog buyers often assume that for an exchange, they will have to pay for the package coming to them, going back to the cataloger and coming again. Naturally, they tend to blame the cataloger for not presenting the merchandise clearly enough in the first place.

Solution

Better, kinder information about returns. I suspect great word of mouth comes from L.L. Bean’s outstanding returns package. Such consideration for the customer also helps keep catalog buyers from deserting.

Bean’s garments come on a hanger in a box with tissue and two very important documents. One is a folded card with a heavy-stock card insert. The insert reads, “Hassle-Free Exchanges and Returns Made Easy!” Inside are absolutely clear instructions, plus two adhesive-backed labels – one for postage-paid Priority Mail, the other a plain label.

The other document is a traditional data-entry form stating the returns policy, but it’s folded to immediately display the huge guarantee. Not only are the instructions complete, they’re written in the manner of one friendly person talking to another about how easy this process is.

Another solution is to test paying for the cost of returns (and promoting this benefit). For one company we have worked with, this incentive outpulled any other tested – and was the most cost-effective, too.

Remember those great Lands’ End ads that touted its guarantee? More of us need to look at our returns process and its costs related to marketing benefits. Then we need to come up with motivations that will be worthwhile to consumers – and advertise them like crazy.

Problem No. 2

Catalogs do not provide the kind of service consumers need.

Service is something everyone interprets differently. To some it means having a personal shopper, while to others it simply means they really will get the package the day after they order it.

The DMA’s focus group attendees had a real problem with waiting for merchandise and not being able to feel and touch it before they owned it. They also felt, because there is no perception of personal service, that they were “just a number” when they called to place an order.

Solution

Only one catalog company, to our knowledge, has been smart enough to use the right verbiage with its overnight service. Most simply stick an overnight service’s logo on the cover and assume that getsthe message across.

This company understands that it’s selling the benefit and not the feature. Its copy reads, `Wear It Tomorrow!’

There always will be customers who want it today (and some catalogs with extensive distribution centers can provide that service), but most catalogers can get it there tomorrow. Say so in language that clearly conveys a benefit to the reader.

Good service reps are relatively abundant in our industry (again, call L.L. Bean if you want to experience a great standard). Play up the fact that these talented people can be personal shoppers.

Some focus group attendees recommended follow-up telemarketing calls. This tactic works for many B-to-B mailers. It’s time to try more of it on the consumer side.

Problem No. 3

Catalogs are not a cost-effective way to shop.

Two very bad words describing catalogs came up in the focus groups: “bothersome” and “expensive.” Here again, the complaint was the cost of products including postage and handling. Attendees didn’t think catalogs offered any bargains over retail, especially after P&H took the price over the top. Plus they found postage and handling charts “unclear, inconsistent and generally confusing.”

Solution

Talk more with customers. Some catalogers actually go so far as to explain to customers why postage and handling costs what it does.

From our own focus group research, we find customers are more open to charts that charge on weight rather than the dollar amount. Many catalogers find that free postage and handling offers are the greatest incentives, especially when mailing cold lists. Keep both these ideas in mind to test.

If you have good prices, brag about it. Explain, again and again, why your products are worth their cost – and the cost of the postage and handling.

Consider cutting the cost of postage and handling to the customer. According to a recent report, 44% of catalogers make money on shipping. Maybe everyone needs every dime they can get – but they also need new customers.

And here’s another thing to consider: Most customers hate paying for postage and handling. In fact, it’s the No. 1 uninitiated topic in focus groups.

We’ll look at more problems and possible solutions next issue.

Katie Muldoon is president of Muldoon & Baer Inc., a Sugarloaf Key, FL-based direct marketing/catalog consulting firm.

If you would like to be part of future Direct Marketing Association research on this topic, call Anne McConnell at 212-768-7277, ext. 1356.