Arandell Corporation

Gary Sierzchulski, VP, Arandell Data Services

In the past much “talk” was given to a direct marketing principle called contact strategy analysis.  What that means in layman’s terms is determining how often and when to reach your customers based on previous sales information.  In other words, using this approach you only contact your customers based upon their past purchase history, so a customer who only purchases during holidays would only be contacted during that season and so on.  The theory here was to maximize marketing dollars and tight budgets.

 Times Have Changed. 

 In the past two years many of you have reduced the frequency of your campaigns for all the reasons which we will not get into detail here.  If you go to your mailbox you will see this first-hand.  But funny things are happening, the consumer is coming back, albeit slowly, and buying!  Buying because they haven’t been for a while and it is our nature to do so.  With or without you they will be back.  So what are you doing about it?

 #1 - Reach out to your customers.  If you aren’t, your competitors are or will be shortly.  Consumers are hungry for deals to satisfy their buying urges, and again have saved up some money to meet those needs.  It’s funny, instead of you creating a sense of urgency with them; they are the ones who are creating it.  So meet their needs.  Even those who you consider your best customers (highest RFM) need to hear from you now.  In the past this segment would buy from you regardless.  Now they want to know that you’re still in business to start with and that you value them and can meet their needs, both emotionally and tangibly. 

 Your older buyers were once buyers from you.  So you need to find out if they are still buying products like yours but just not from you.  There are several ways to do this and if you contact me we can discuss the methods to identify them. 

 #2 - Service is a lost practice.  You need to make it easy for them to return to you and more importantly buy from you.  Shipping incentives, in store pick-up, loyalty rewards, anything and everything should be considered to make your customers feel special again.  You have four marketing channels to interact with your customers.  Use them all but pay attention to which channels they choose to interact with you.

 #3 - Build up your brand.  Many of you “went away” for a while.  Your customers need reassurance that you’re still there for them.  More frequent contact now as opposed to selective contact will get you there.  Most of you have noticed that your house file is stagnant at best or probably has decreased over the past two years.  For your survival, that trend needs to stop but will only do so through increased contact with your customers and reaching out to potential customers, something of a lost art called prospecting. 

 #4 - Thank them for their business.  How? - By telling them.  As I said many times before, the more quickly you reach your buyers after a purchase, the higher the future response rate is.  And if you personalize the piece in some fashion the responses are even higher.  Why wouldn’t you make this a standard part of your business practice?

 Again, the time is now.  Create the sense of urgency with your customers and they will respond.

Blake Hutchison, Director of Purchasing

Wow, what a difference a few price increase announcements make on demand!  I think the mills got the desired effect they were looking for.

Lead times are increasing and increasing rapidly.  Coated groundwood grades seem to be accelerating the quickest, with lead times already out 5 - 7 weeks.  Coated freesheet, while not as bad, is still out 3 - 5 weeks.

The greatest factor in how quickly you can get paper is the basis weight.  If you print on a heavier weight (70#, 80#, 100#) your lead times won’t be as long.  38# through 60# basis weights, both coated groundwood and coated freesheet, are in high demand and their lead times are accelerating faster than the heavier weights.  32# - 38# is a little better, but not by much.

My advice would be to get your paper situation figured out quickly and at least get an LDC date to work off of so that you can properly estimate how much time you are going to need. 

If you have any questions, please don’t hesitate to email me  or call me at 800-558-8724

Thank you.

Don Landis, VP, Postal Affairs

Since its inception three years ago, the ACMA (American Catalog Mailers Association) has focused primarily on the very issue for which it was founded: being catalog mailers’ watchdog group for keeping postal rates in check. To date, no organization had gone to bat solely for catalogers when it came to postal matters. ACMA’s mission is to advocate for catalogers where others cannot. They also partner with other organizations where catalog interests are squarely aligned.

ACMA’s such collaboration revolves around the new Colorado sales and use tax reporting requirements for out-of-state sellers who do not collect sales taxes from Colorado residents for their purchases. This law became effective on March 1, 2010.

And with that, the ACMA poses the following: What’s worse than having to pay sales taxes in every state? Having to report to every state every purchase your customers have made so the taxing authorities can start chasing your customers down and ordering them to pay back taxes.

Your Colorado customers now must get a statement recapping their purchases that you will also have to send to the Colorado tax collectors so they can hunt your customers down for the sales tax — and probably with a penalty on top of this. This experience is sure to make Colorado customers think twice about ordering from you, plus you now have an added cost of compliance without any offsetting revenue. It’s a triple whammy.

But wait, there’s more. Tennessee, California and other states are considering this same law or watching Colorado’s closely. Fact is, every state needs more revenue today. Out of state companies, who do not use any state services and who do not elect state politicians, are easy targets.

The Direct Marketing Association is coordinating a multi-industry legal challenge to the new Colorado tax law and will be using acknowledged state tax expert attorney George S. Isaacson to stop this from doing real damage to direct sellers of every type. We fully support DMA efforts.

Per a memo from DMA senior vice president, government affairs Jerry Cerasale, the new reporting law was passed by the legislature and signed by Colorado Governor Bill Ritter Jr., as part of a budget balancing package. DMA and others urged the Governor to veto the bill, but to no avail. It now must be challenged in the courts.

The reporting law requires non-sales-tax-collecting out-of-state marketers to notify Colorado purchasers with every purchase and includes the following stipulations:

• They are not required to collect sales tax;
• Sales or use taxes are owed by the purchaser unless the sale is exempt from sales tax even though purchased remotely, including over the Internet, telephone or catalog;
• The purchaser is required to annually file a sales/use tax return with the Colorado Department of Revenue and pay tax on those purchases on which the resident has not paid sales tax;
• The marketer is required to provide the purchaser with a year-end summary of the purchases the consumer made on which sales taxes were not collected; and,
• The marketer is required to provide the Colorado Department of Revenue an annual report on the total amount of all the purchaser’s purchases on which sales tax was not collected.

More information can be found at www.taxcolorado.com.

Taxing indeed!

The proposed year-end notice to the Colorado purchaser regulations require the following:

• Notice sent by Jan. 31 only via First-Class Mail with “Important tax document enclosed” appearing prominently on the envelope;
• A summary of dates of purchase, description of product purchased and dollar sale amount for each purchase;
• A statement that Colorado requires that the purchaser file a sales/use tax return at the end of the year and pay tax on all Colorado purchases on which no sales tax had been collected;
• Inform for the purchaser that the form and further information is available at www.taxcolorado.com;
• Notification that the marketer is required by Colorado law to provide the Colorado Department of Revenue with the total dollar amount of purchases the purchaser made; and,
• Though not required, it may inform the purchaser whether an item purchased is exempt from Colorado sales tax.

The notice to the Colorado Department of Revenue must include this information:

1. Name of the Colorado purchaser;
2. Billing address of the purchaser if provided to the marketer;
3. Shipping address of each purchaser if provided to the marketer;
4. If the marketer has multiple billing and/or shipping addresses of the Colorado purchaser (Colorado purchaser is a consumer who has product shipped to him/herself in Colorado), provide all such addresses; and,
5. Total amount of Colorado purchases made by the purchaser from the marketer.

For more information, please feel free to contact Don Landis, Arandell’s VP of Postal Affairs, HDLandis@arandell.com.  He can also be reached at 800.558.8724.

Gary Sierzchulski, VP, Arandell Data Services

This past week I was in New York.  It was a beautiful, sunny afternoon and I was sitting on a bench at Noon eating a hotdog and watching everyone rush by on 6^th Avenue.  What I noticed more than ever is that most people were not enjoying the great weather or for that matter, the people walking around them; they were too busy with their heads down looking at their phones.  I did a quick test.  For one minute I counted the number of individuals who were not using their phone either to (believe it or not) talk or to look at their emails, websites and yes, mobile apps.  There were only 33 people who fell into that category…33 people out of hundreds that rushed by!  That is incredible but not unusual.  We have become obsessed with our phones and their ability to do just about everything for us.  Here is an interesting fact; people sleep more nights with their phones than with a human person.  These phones must be something special.

Today there are over 285 million mobile phones in use in the U.S. and of those, 160 million have the ability to text.  Get this, even though there are “only” less than 50 million iPhones and Blackberrys in use, the Apple store has downloaded over 2 billion apps so far. You do the math.

So you have two choices; embrace this new technology or think it’s a passing fad that will be gone as soon as the next major communications invention arrives.  Let’s take the side of embracing it.

When we look at the different marketing channels we think of the basics; brick and mortar, direct mail and the youngest member, the Internet.  Now there’s a new kid in town - mobile, and he’s growing bigger each month, more than the other three combined.

So how do you get on the mobile wagon?  There are a few steps to take to see if it’s right for you now.  Keep in mind it’s not a question of IF its right, but rather a question of WHEN it’s right for you.  Sooner or later you will be riding the Mobile Wagon.

1. Look at your customer base.  How much of your sales are generated through the Internet? (Don’t be confused with “through the Internet” as opposed to by the Internet.)  Most likely you see that number growing, meaning your customers are savvy, technological capable, and want to control the buying decision when they want to.  If you answer, “yes” to this - you are ready for mobile.
2. In analyzing your web results, what percentage of hits is from mobile phones?  If you see any at all - you are ready for mobile.
3. Do you want the ability to “talk” to your customers at any time or any place they are, maybe even as they just walk into your store?  If yes - you are ready for mobile.
4. Do you want to give your customers the option to experience a rich, visual, and inviting view of your store that is always open for business?  If you say yes to this - say mobile.
5. Can your customers walk and talk at the same time?  Are they over the age of six?  If yes - you are ready for mobile.

Keep in mind, mobile will not, repeat, NOT replace any of your existing marketing channels.  What it will do is give your customers another alternative to see your products, understand your company and most importantly buy from you in a very different environment.  Used strategically with your other channels, mobile is a great new addition to your weaponry. 

There are several ways to break into the mobile market.  The beauty of this technology is that you can take it very slowly and build over time or go hog wild from the get go.  Either way, you will be adding a whole new dimension for your customers and prospects to interact with you.  And since this technology is relatively new, most marketers have only begun to unleash the ability of this channel so you can get very creative and give your customers a highly unique experience before others copy your great idea.

So do not fear, mobile is here and is not going away.  But it is a great marketing partner for you and its possibilities are only limited by your creative abilities.  Give me a call to learn how Arandell is embracing this technology and how we’re working with our customers to incorporate mobile with the Mother of all marketing channels - The Catalog.

Jim Treis, EVP, Sales & Marketing

Menomonee Falls, WI, Austin, Texas, April 15, 2010 - Arandell Corp., North America’s premier and most robust offset printing company, today announced a partnership with Digby, the leading provider of mobile commerce solutions for retailers, to power Arandell Mobile Solutions, providing retailers with mobile optimized extensions for their print catalogs. Additionally, Arandell and Digby have entered into an ongoing Strategic Marketing Agreement to develop innovative and cutting edge cross-channel marketing practices that fully leverage the complementary strengths of catalog, mobile and in-store channels.

 “Through our internal response analysis we conduct for our clients, catalogers who integrate a mobile solution into their overall marketing mix see a significantly higher customer response to their marketing messages, produce a higher customer average order and achieve higher customer retention” said Jim Treis, EVP Sales and Marketing at Arandell. “We chose to partner with Digby because of their expertise and experience in our market, coupled with the fact that their solution works seamlessly across multiple phone platforms. This combination makes Digby unique in the market. They were the natural choice to power for Arandell’s Mobile Solutions offering.”

Consumers are increasingly looking to their mobile devices to research products they are interested in. Making it easy and efficient for mobile users to find product specifications, access social content such as product ratings & reviews, share products with friends through integration with Facebook, and even access product availability in retailer’s stores, all of which are components of a comprehensive multi-channel strategy. Arandell and Digby have developed best practices and standards for catalog retailers that enable consumers to use their mobile device as part of the shopping experience. Mobile integration points include mobile friendly urls and bar codes that provide consumers with real time access to  relevant information for their purchase decision.

“Forward thinking retailers are treating mobility as a strategic opportunity and delivering an immersive mobile experience.” said Dave Sikora, CEO of Digby. “Our relationship with Arandell will allow us to deliver a compelling mobile experience that complements their direct mail and catalog initiatives.”

According to a recent survey by Ruder Finn¹, an independent public relations agency, 34% of mobile users use their devices to find background information on products or read product reviews. 

¹ Ruder Finn Mobile Intent Index (http://intentindex.com/mobile)

 For additional information, contact:

Katy McDermott
Marketing/Sales Analyst
Arandell Corporation
KMMcDermott@Arandell.com
www.Arandell.com

Stephen Slezak
Marketing Director
Digby
sslezak@digby.com
www.digby.com

Blake Hutchison, Director of Purchasing

Over the past three business days, we have seen the North American paper mills announce price increases.  The following is a list of mills, the affected grades, and when the increase takes effect:

 Appleton Coated:

• $1.50/CWT
• Effected grades:
  • Utopia 3
  • Utopia Book Family Grades
  • Utopia Film Coat
  • All private label grades
• All basis weights and finishes
• Effective with shipments April 1^st, 2010 or later.

 West Linn:

• $1.50/CWT
• Effected Grades:
  • Sonoma
  • Capistrano
  • Natureweb
  • Natureweb Plus
• All basis weights and finishes
• Effective with all new or existing orders shipped on or after April 1^st 2010.

 Verso:

• $1.50/CWT
• Effected Grades:
  • Influence
  • Velocity
  • Liberty
  • Advocate
  • Clarity
• All basis weights and finishes
• Effective with all orders entered immediately (3/15) and all order shipping on or after April 1^st 2010.

 Evergreen:

• $1.50/CWT
• Effected Grades:
  • TruSpec 4
  • TruSpec 4.5
  • TruSpec 5
• All basis weights and finishes
• Effective with orders entered immediately (3/16) and all orders shipping on or after April 1^st, 2010.

 AbitibiBowater:

• $1.50/CWT
• Effected Grades:
  • AbiBowGloss
  • AbiBowBright 76
  • AbiBowBright 80
  • AbiBowMax 84
  • AbiBow SCA
  • AbiBow SCB
  • AbiBow SNC
• All basis weights and finishes
• Effective for all new orders placed immediately and for all shipments effective May 1^st, 2010.

 NewPage

• $1.50/cwt
• Effected grades:
  • Arborweb
  • Orion
  • Vision
  • Escanaba
  • Dependoweb
  • Capri
  • Consoweb
• All basis weights and finishes
• Effective with new orders entered on or after March 15^th, 2010.

Why the increase?

In discussing these increases with the various mills, the most common answer has been their production COSTS. Indeed, those have been on a slow, but steady rise over the past six months, especially with the price of their primary input, pulp. The mills were able to absorb these rising costs as long as they were still making money from the Black Liquor tax credit, but now that it is gone (as of 12/31/09) they are hurting.

Another reason being given is the strength they are seeing in their order logs. Since November 2009, there has been an uptick in orders, and year over year paper shipment numbers have seen double digit increases since December 2009. The mills have curtailed so much production in the past 24 months that they believe they have been able to bring their supply level in line with demand. 

Will there be more?

My estimate is that the $1.50/cwt increase is only half of what the mills really want. I believe they initially wanted $3.00/cwt, but have since realized that perhaps two $1.50/cwt quarterly increases would be a more effective way to incrementally get what they desire. I very much expect to see another $1.50/cwt increase, effective July 1, 2010.

Gary Sierzchulski, VP, Arandell Data Services

A funny thing happened on the way to proclaiming the print catalog is dead……..IT’S STILL ALIVE!

If you have spent the early days of 2010 analyzing the results of your Fall and Holiday campaigns, you may have noticed something a little strange; emails, God love’em, were blasted out in record numbers in 2009. That was good news for me because I sold a lot of email appends.  As a result of all that clutter in peoples’ inboxes, not to be confused with mailboxes, the results were not all that impressive. In my humble opinion, direct marketers looking to cut costs as much as possible, yet still justify their existence, took the route of emails over direct mail to get the message to their customers, or in some cases to prospects. In many peoples’ analyses they noticed that the average transactional value in most cases significantly decreased. Marketers took the approach that more is better. Now many are discovering that more is not always effective. That’s the bad news for me - now they want answers as to why this approach did not always work. While marketers are trying to get a handle on this, we have seen the number of emails significantly decrease over the first two months of 2010, almost by the same amount they increased last year. Oh yeah…I forgot to mention that many are turning back to the direct side in the meantime.

Do not be confused; email campaigns are still highly critical to one’s overall marketing and branding efforts. What seems to have been lost is the fact that many of these email campaigns fail to “show me the money.” Just because they are cheap, it does not mean they are the best way to engage your customers. In order for an email campaign to be successful, the same tried and true direct marketing rules need to be applied. In fact, because emails are inexpensive there is no reason for the campaign NOT to be relevant, personal and recognizing the customers’ recent history with you. 

Here is a thought you may want to consider…if you have customers that have not purchased from you in the past six to nine months, conduct a test (isn’t that the beauty of direct marketing?). Take half of those customers and send them an email offer enticing them back to you. Then take the other half and send them a direct mail piece (catalog or similar) with the same message. I’ll bet you two things will happen: (1) your average transaction will be higher from the mailpiece as opposed to the email and (2) overall sales from the campaign will be higher. If you really want to get nuts, segment this group into thirds and the third group gets both the email and direct mail piece. 

However you want to do this, the important factor here is that you talk to these people as individuals. I was just at the Black Eyed Peas concert the other night along with 14,000 others. We were all there to see the great performance so we had that in common (like the customers who buy from you), but as I looked around, I realized I had very little else in common with those around me. So to “target” a message to this general audience about an after-concert party at a night club offering three-for-one shots of some kind of vodka until 3:00 a.m. on a work night would not interest me (actually it does but for this article the official word is that it does not). But a message telling me of a valet service that would also allow me a quicker exit from the place after the concert would be of great interest. The point is that your customers are very different from one another. You have the data to prove that. You do, right? If not call me ASAP. Now use it like there’s no tomorrow (because one never knows).

Me? I want to be media agnostic - use the best channel or channels for the specific campaign. But all channels should work together so your company will not only survive but thrive. 

Remember - your catalog is still the most important merchandising tool you have. Treat it as such.

Jamie Marquardt, Director, Marketing & Communications

Happy Holidays to you and yours from all of us at Arandell Corporation! Our corporate blog’s innaugural year is nearing its end and we can’t begin to express how much we have enjoyed this addition to our marketing repetoire. Here are the links to your favorite articles to date:

A Flurry of Postal Updates: Droop Test, Move Update, Winter Sale, Dry Release Cards

Do you Pass the Droop Test?

9 Reasons to Mail More in 2010

No Postal Increase in 2010 - Really?

Canada Post Corp. Rate Changes Effective January 11, 2010

If you have any suggestions or requests for future blog posts, please send an email to blogging@arandell.com. We thank you for all of your feedback so far and look forward to adding more in the New Year.

On behalf of all of us at Arandell Corporation, we wish you a happy and safe holiday season.

Jamie Marquardt, Director, Marketing & Communications

Have you heard that line before? If so, I hope you don’t accept it as your “final answer.” Just because something has always been done a certain way, that’s no reason to keep doing it the same way, unless of course the method has no room for improvement. And, I certainly hope you have not been applying the “because it has always been done that way” mentality to your catalog design. You can still maintain brand image while also changing up variables such as layouts, messages, formats, sizes, page counts, in-home dates, etc. In fact, you should be changing things up to measure how response rates fluctuate from one catalog design to the next.

Maybe you’re a cataloger who has always mailed letter-size booklets or “Slim Jims.” How has your response rate changed since the USPS implemented its new tabbing regulations earlier this year? If it has gone down, maybe it’s time to try something new, like a traditional upright format. Have you typically produced a catalog with an oblong format? With the USPS bringing out new Droop Test regulations, now is the perfect time to implement a new format for your catalog because the oblong is not going to survive with the new droop/deflection standards. Could you transition to an upright or square format? Try it! Have you always treated all customers, regardless of purchase history, the same? If so, maybe it’s time to use a more dynamic approach to how you target customers. Do you use database marketing to help you with those efforts? If not, it’s time.

all about ROI recently released its “50 Best Tips of 2009“; I highly recommend reading it, as it gives some great ideas for changing up your current multichannel marketing plan (or offering you reassurance for the one you already have). Regardless of what strategies you decide to implement going forward, don’t apply the same ones as this year just because “that’s the way it has always been done.” That’s a sure fire way to bring your success to a standstill. Change is good. Embrace it!