July 19, 2017

By Anna-Lisa Ulbrich

Question: Do you send promotional emails to your housefile?

Answer: Of course, we do! Customers have come to expect promos in email.

Question: Do you offer promotions (Free Shipping does not count!) on your catalog cover to your housefile?

Answer: No. It diminishes the brand.

Answer: No. It violates the cover.

Answer: No. We do not want the coupon sites to pick up the offer.

Answer: No. We do not want to train our customers to only shop on promos.

Answer: No. We simply do not believe in promotions, but what else can we do to drive response rates?

We hear all the above (and more!) reasons why clients are averse to using promotions on their mail pieces to their housefile. Five years ago, I might have agreed with them. But, oh my, have the times changed. The reality of it is that except for a few niche categories, the DTC responder universe is NOT growing. This means that more and more, you must compete for wallet share from the same pool of prospects, but shoppers are smarter and savvier than ever. Part of being a smart shopper is shopping on price (thanks, Amazon!) but also on customer service, brand loyalty, quality and uniqueness. Premium, high quality brands such as Serena & Lily, Coach, Neiman Marcus, Lafayette 148, Boden, Restoration Hardware, Williams-Sonoma (the list goes on and on) use promotions on their catalogs, but not in a willy-nilly, one size fits all approach.

We advise clients all the time: If you are willing to promote to your housefile via email, why not also allow a promotion on your most expensive marketing vehicle? Plus, you likely do not have 100% email capture on your housefile and there may be lapsed customers who are not receiving your promotions. However, there is a smart balance and strategy to using promos via the catalog. Many clients use a staggered catalog promotional approach so as not to A) Truncate full price demand that they would have gotten from buyers who do not need a promo, or B) Step on the toes of other online or email promos that are running concurrently.

You may still be reluctant…

But it still diminishes the brand!

  • You do not have to scream major discounts at your customers. There are more subtle ways of being promotional by limiting it to a specific category, or offering a tiered discount which would encourage a higher AOV.

But is still violates the cover!

  • You should strike a balance between your beautiful cover photography and a dotwhack or cover wrap. While the promo does not need to be a fluorescent yellow dotwhack, it does need to be noticeable on the front and back cover (remember, 50% of consumers receive their catalogs face down!). Here are some creative tips:
    • A promo can look like a natural extension of a brand, even an upscale one, if the cover’s imagery and design are created to accommodate it.
    • A pretty picture is not spoiled if the shot was taken with all the “prettiness” clear of the lower right hand corner where the promo is planned.
    • Cover promos must stand out but with brand standards in mind (if blood red 72-point font is not in the brand standards, do not feel you must use it!).
    • If a brand’s customer expects savings of some sort, and so many today do, it is a disservice not to include one.

But we still do not want the coupon sites to pick up the offer!

  • Frankly, some retailers do not care, but for those that do, you can create a unique promotional code that is inkjetted on the front and/or back cover that is good for one time use. This process is easily facilitated by service bureaus and/or printers.

But we still do not want to train our customers to shop on promo!

  • There is a fear that if a customer is acquired via a promo, then they will only shop on promo. This is a fallacy. We have evaluated the impact of promotions over time for many retailers, and we find that customers acquired with a promo are no less valuable over time. We find that even if a customer’s demand curve falls off faster, the up-front lift from a promotion of 15% off or greater is enough to keep LTV flat or even higher over time. That said, weak promos like 10% off are not generally significant enough to move the needle, and Free Shipping is so standard now that most would say it is not even a promo but simply the cost of doing business online.

We do not believe in promotions, but what else can we do to drive response?

  • Order starters: Take a signature item, like the pool lounger for Frontgate or the cashmere wrap sweater for Garnet Hill, and feature them at special introductory price points as a way of driving response rates. These items should be high volume drivers to make a real impact.
  • Merchandising Mix: Adding spontaneous “pick-up” items to your assortment. For example, furniture is a high consideration purchase with a longer sales curve. Categories like table top and decorative accessories help to drive faster response rates.
  • Lower AOV: Response rates and average order size are always inversely related. Most Home DTC brands have an AOS closer to $200 than $300 or $400 because of the balance of their merchandise mix as indicated in the bullet above. For example, you can get $2 sales per piece by having a $400 AOS and 0.5% response rate OR by having a $200 AOS and 1% response rate, in which case you are growing your file twice as fast.

A note about testing promotions on catalog front/back covers – the modern-day waters are muddy! It is difficult to get a clean read on offer tests in the mail today because a prospect has so many opportunities to find different promotions. We know promotions work, but testing is not always conclusive, especially if the offer is barely promoted in/on the catalog. Also, in this day and age of promotions, catalog promotional testing results are muddied by other promotions in other channels: Email, home page, social, etc. and promo code tracking might only give you 30% of the results, anyway.

July 7, 2017

By Bethany Christie

In our world, remaining relevant is key. We all know it is a challenging retail environment. As the back to school and holiday seasons approach, let’s make sure your direct marketing strategy is up to date and thriving. So, how do we remain relevant? Accepting (with open arms!) that this is the next generation of direct marketing and ensuring we have the best methods for keeping our clients top of mind…

Keep it fresh. Discover new sources of names – postal append for email non-buyers and web browsers.

Trigger direct mail pieces. Everybody loves an excuse to recognize an occasion such as a birthday, holiday or anniversary.

Think out of the box. Include a variety of form factors to various mailed segments; not just catalogs all the time.

Go for it. Get creative and direct your pieces toward story-telling and imagery; pull back on the pages and density.

Get personal with products and demographics such as gender, geography and email/ web engagement.

Optimize with contact testing. Ask yourself: “What is the optimal number of contacts for my housefile and prospects?”

Get real with RFM+. Include product, previous contact history and email engagement.

Test and re-test. Analyze display based on customer wallet activity and not web browsing (common error!).

Create opportunities. Reconsider alternative media – it can generate more upscale opportunities today than in the past.

As always, we are relentlessly focused on new opportunities that will deliver results. If we can help, please do not hesitate to contact us: Donna Belardi at donnab@belardiostroy.com.

June 29, 2017

By Bethany Christie

At Belardi/Ostroy, we are fixated on growth. Your success is our success. Our favorite motto? We are the company we keep. Whether we are working with a new or longstanding client, asking the tough questions is important. In a world that is moving faster than ever before, both retail and e-commerce are changing daily. We offer the most relevant and useful recommendations to our clients by constantly asking ourselves:

  1. How many contacts across channels does it take to convert a prospect?
  2. What is the overlap in customer interaction across marketing channels?
  3. What is the client’s lifetime value/ breakeven for prospecting thresholds based on the season of first purchase?
  4. Which of the client’s marketing programs can still scale; which ones have peaked?
  5. What is the client doing to increase response rates? *Inside Scoop: Major drivers are product category expansion, new stores, celebrity endorsements, etc.

Interested in hearing more? Reach out to donnab@belardiostroy.com for the complete download.

June 14, 2017

By The Belardi/Ostroy Team

We continue to expand based on the needs of our clients. Direct marketing and new customer acquisition will always be at our core, but here are some of the additional ways we are engaged with clients today.

  • Merchandise analysis & strategy
  • Investment due-diligence
  • Market research
  • Email marketing optimization
  • Long-range planning
  • Digital acquisition strategy
  • Integrated acquisition planning
  • File-growth planning
  • Social marketing strategy
  • Competitive set analysis
  • Logo design and brand guidelines for new retailers
  • Online / DM integration
  • Content strategy
  • Outsourced marketing
  • Board meeting preparation
  • Staff training / coaching
  • Ecommerce site benchmarking
  • Mail / digital file Integration
  • Creative services
  • New business / channel launches
  • Database business requirements
  • RFP preparation / management / oversight
  • Digital data monetization

June 8, 2017

By Polly Wong

This is a friendly reminder that we live in an oversaturated world where your target customer can buy almost anything and get it tomorrow, typically with free shipping and hefty discounts. We often find ourselves talking about the importance of brand voice and story-telling. Why we should buy from one brand vs. another. The concept of having a ‘unique selling proposition’ has been around a long time, but with myriad choices it’s become almost mission-critical. I say almost because I’m not sure unique product alone is enough. In today’s world, it is virtually impossible to have something truly unique. Why buy hoodie X vs hoodie Y? If they both have the same tech features, and they look the same and cost the same, then how do we decide? Is it who gives us the bigger discount in the end? Or who is making it in America instead of overseas? Some industry experts would argue that not only does your product need to be unique, but your approach has to be disruptive.

Here are a few questions you should ask to make sure you can compete:

  • Do you know what motivates your customers’ behaviors and buying decisions?
  • Do you know why they buy from you vs. your competitors?
  • When was the last time you actually spoke to your active customers? Your lapsed customers?
  • Does your team believe in your brand? Are they customers too?
  • Are you relying on shipping income to support your business instead of product sales growth?
  • What have you done as a company that is truly new this year?
  • When was the last time you tried something major and failed? Is your organization afraid of change?
  • Do you track the competition daily or at least weekly?
  • What percentage of your budget is spent on product development or customer research?

The always-critical holiday season will be here before we know it. But there’s still time to make an impact, and thinking through these essential questions is a great start. Happy to help, as always.