Arandell Corporation

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.

Blake Hutchison, Director of Purchasing

I recently read an article in Multichannel Merchant that detailed some ideas about how a cataloger can gain control of their paper spend for 2010 and how these ideas will always result in lower costs.  In reviewing these ideas, I found some of them to contain the truth, but not “the whole truth” as they say in court.  So I thought I would provide some perspective from a printer who supplies paper for many of our clients.

Idea #1:  Establish long term pricing now

Pricing levels have decreased some 20% YTD.  And while the buyers of paper have had the upper hand throughout the year, that will change in 2010.  The producers will be able to pass along some increases.

Printers have the upper hand when it comes to negotiating pricing caps.  When an end user is negotiating their prices with a mill (through a merchant), their only negotiating tool is their annual tonnage.  A printer has the ability to take the annual tonnage of all of their paper clients, combine them and use the whole as leverage with their mill partners, thereby increasing the paper buying power of their clients.  By being part of the whole, you can significantly limit your exposure to these increases.

Ideas #2 & #3:  Challenge your printer to reduce waste and use paper calculators

Paper waste is a natural part of the printing process. A printer is not only challenged on their waste factors by end users, but also by the industry as a whole.  The more they can reduce their waste factors, the better position they are in to reduce paper consumption costs.  A “paper calculator” is a very generic tool that some merchants have put together to try to challenge the printer on their waste and create an “in” with an end user. 

The printer knows their presses. They know the most efficient way produce a job on press.  They know what grades, basis weights, finishes and specific brands of paper perform the best on their presses.  They work everyday on ways to reduce paper waste factors.  Yes, it is important to consider waste.  But to use a very generic calculator to come up with tonnage numbers that really have no basis in reality is a good way to create contention. Trust me; the printer is doing their very best on your behalf.

Ideas #4 & #5:  Reduce your cover and text weights

Always a good thing to consider when looking for ways to reduce paper costs.  But BE CAREFUL.  It might not always be the best idea.  The USPS has just announced new “droop test” regulations that have a lot of end users scrambling to HIGHER basis weights in order for their pieces to pass the test.   

You also might want to consider how your printed piece will look.  As you decrease your basis weight, you are sacrificing opacity and creating “show through”.  Your printer should have plenty of printed samples of what downgrading in basis weight will look like.

Idea #6:  Ship rail

Remember the idea of combining purchases to leverage paper prices?  The same can be done with shipping costs.  The more paper you are ordering as a whole will dictate whether or not you are able to ship rail.  An end-user who prints three or four times annually only gets to combine those tons in a shipment.  But a printer who may have three or four other paper clients printing right around the same time can combine those tons and get them to ship rail.  A printer has the ability to forecast, well in advance, and is in a much better position to work with mills to achieve maximum transit cost savings.

Some other ideas not mentioned in the article:

• For those end users who purchase their own paper: pay close attention to your consumption reports. The leftover inventory that is listed on your report is REAL MONEY and should be utilized as quickly as possible. Make sure you work with your printer to find a home for it as quickly as possible.
• If an opportunity to use it isn’t readily available, work with your printer to get rid of the paper. They might have an opportunity to use it on another printing for another client and might buy it from you.
• Do you know what the storage and handling charges are at your printer? If not, you should. The storage and handling of paper is a real cost to a printer. If they aren’t supplying the paper, they are going to need to charge for those services.
• In many cases, if the printer is able to supply the paper, they will waive those charges.

Questions? Please feel free to contact me any time at 800-558-8724, ext. 165 or BJHutchison@arandell.com.

Don Treis, CEO

As Americans prepare to carve pumpkins, Trick or Treat, join friends and family in a time of giving thanks and purchase presents for loved ones, the catalog and direct mail world awakens. We in the direct mail business understand the rush of excitement of preparing files for catalog layouts, fine tuning mail files, controlling order fulfillment and optimizing marketing strategies.  A direct mailer’s world is turned topsy-turvy this time of year to ensure we utilize every ounce of what the holiday season has to offer.

Arandell Corporation understands that catalogers and direct mailers are in the midst of an exciting, stress-filled and demanding season.  Earlier in the year, we were preparing for YOUR busy season. During the summer months we performed LEAN initiatives to ensure our equipment was prepared to produce top-quality materials. Early this autumn we met with our sales representatives and sales support to educate them on the latest industry technologies and trends. We are prepared to assist you in all of your catalog and direct mail needs, not limited to just printing and distributing mail.

Perhaps your catalog is not receiving the expected ROI. We can help you inspire solutions such as updating your mail lists or changing formats to better suit your target market. Perhaps you are receiving large returns on an item. Our prepress experts can evaluate the printed color quality to determine precise color matching.  Are you having difficulties understanding the effect your catalog and direct mail piece has on sales? Our data guru can work with your company to optimize your matchback program.

I would like to stress that we at Arandell Corporation can consult in best practice catalog solutions. We have been in the catalog business for decades, proudly working with leading companies to increase their profitability. Our job is to help your “busy season” complete successfully.  Give us a call while there is still time to enjoy the season!

Susan Pinter, Director of Postal Systems

Arandell Corporation has printed and mailed many retail and mail-order catalogs. Both have their own unique requirements based on their marketing objectives.  For instance, retail catalogs have particular in-home dates to meet and are planned in meticulous detail with in-store promotions. Our standard mail-order catalogs often have personalized order forms and inserts that need matchback information to correlate in-home dates and Internet traffic.

With the upcoming changes to the USPS method of tracking mail, specifically transitioning to the Intelligent Mail barcode (IMB) system, the needs of our retail and mail-order clients will be adjusted. Click here to learn more about IMB. We have been surveying our customers to determine how they, or if they, plan to use the Full Service IMB option. As of today, only our retail customers have expressed a desire for Full Service IMB to be used for tracking purposes. Additionally, some retailers are toying with the idea of using the Full Service IMB in lieu of printing Point-of-Sale personalized customer barcodes on their direct mail pieces.

I am writing to learn the opinion and perspective of our standard mail-order catalogers. We have already heard several possibilities on how they might use the IMB services, but at this time have not heard of any immediate plans for mail-order catalogers. Our understanding is most catalogers are just looking at “What if?” scenarios.  

Some of the things we have heard being pondered:

• Using IMB in lieu of matchbacks
• Using IMB data for segmentations
• Of course, retail and standard mail-order catalogers are taking in cost considerations with the different IMB options.

It seems the possibilities center around being able to use the IMB for smaller segmentation of files. I would love to learn what you are planning! Do you believe that Full Service IMB will have a large ROI? What information are you most interested in collecting? If you are NOT considering the Full Service, why? Do you fully understand the file requirements to implement your desired IMB service? What possibilities are there for using the IMB in a standard mail-order world other than tracking?

Look forward to hearing from you!

Gary Sierzchulski, VP, Arandell Data Services

One of the most critical factors that is often overlooked in regards to Address Quality is the ability to better understand and view your customers.  Here’s is what I mean.

Suppose you have customers John Smith at 125 Ferret Street and J Smith at 125 Ferret Avenue Apt 2.

The John Smith at Ferret Street has purchased 9 products from you over the years, but none in the past 12 months.  However since he’s been a customer of yours, he has purchased $1400 worth of your products.

The J Smith at Ferret Avenue Apt 2 has purchased a $65 item from you 5 months ago but nothing before or since then.

Based on their past buying history, you would treat these two customers (or should) very differently.  In fact, if you were doing a mailing to only customers who purchased over $100 from you within the past 6 months or who has spent over $1500 life to date neither one of them would receive your mailing and you and they would miss out on a great opportunity to connect.

However through the proper use of address integrity products and duplicate identification processes we have cleaned up their information and these two customers now become one. 

Bad news is you just lost a customer. 

Great news is that you identified one of your best customers. Now you can communicate with him in a whole different way and acknowledge the fact that he indeed is one of your best customers.

Read more…

Gary Sierzchulski, VP, Arandell Data Services

What if you could predict something that was about to happen and act on it as opposed to reacting to an event that already happened? Wouldn’t that give you an edge on your competition?

Typically we analyze past events of our customers to predict future events. Modeling, overlays, Lifetime Value, etc. are all based on historical events, which very often are good predictors of future events or occurrences. Thanks to new data being available, however, we can get a head start on some life-changing events of our customers before they actually occur.

Read more…

Anna Hoffman, Sales and Marketing Analyst

What was then…

As consumers we all know what a catalog is. Personally, I was introduced to catalogs starting at a young age. My older sister and I often got into battles over who could view the American Girl doll catalog first. As we were both avid fans and collectors (my sister owned “Molly” and I myself had “Samantha”) of the new trinkets and clothing items that had come out for our little dolls. I remember vividly carefully earmarking the glossy pages of the catalogs filled with items that I positively NEEDED for Samantha.

What I have now…

Today, though I don’t receive the American Girl catalog any longer; my mail box is full of catalogs…well, what some would consider a catalog. Just yesterday I received a Patagonia “catalog.” Beautifully printed (kudos to Arandell!) the book was filled with images of waterproof shells, down jackets and other outdoor gear and apparel. There was, however, MORE than just merchandise. As each cover indicates, the catalog is filled with amazing images from around the world. Captions denote the location and credit the photographer and in some books, provide inspiring narrative for browsers. In fact, about 45% of the catalog consists of non-selling space. The photos, captions and tales not only reiterate Patagonia’s commitment to restoring the disappearing wild world they love so much, but they also inspire the readers to keep the catalog a bit longer. Angela Weidmann, Catalog Print Production Manager at Patagonia stated,

“Customers report that the captions for the image photos are the most-read copy in our catalogs…The editorial content does prompt customers to contact us regularly. They let us know they keep our catalog around the house for months or longer; some have collections dating back decades, and many have told us they savor reading our catalogs.”

Not sold on the customization theory? Read on…

Read more…

Gary Sierzchulski, VP, Arandell Data Services

In case you haven’t heard this lately, ROI is the not-so-new mantra. Click here to see the latest epiphany from eMarketer exclaiming ROI a must-have. Costs seem to be driving many decisions lately; this is no surprise because many of you are in survival mode right now.  With all the channels / customer touchpoints now in play, it is more important than ever to understand the impact these have on your business and the revenue they generate (and yes…as well as the costs associated to them).  We talked about matchbacks as being a key, but as you all know it’s not an exact science. Tim Perry from CWDKids recently stated his frustration about the lack of conclusive data in an article in MultiChannel Merchant. In my opinion, however, matchbacks do give you a very good handle on what is driving your business and as long as the business rules are constant, the information is extremely valuable and useful in analyzing current campaigns and in preparing future campaigns.

The biggest constant resource in all of this is your database. It is also your biggest asset. Your database should accommodate all your marketing channels and any new ones that are being created this week.  By accommodate I mean that each channel can be clearly viewed and measured in terms of your key needs. The database should also support outgoing information as well as incoming information.

Outgoing information includes; dates, costs and event codes for all campaigns; direct mail, retail, email, Twitter, text or even the ancient telephone campaign. It is critical that each time you touch a customer that information is maintained. With the cost of storage and data decreasing as I write this post, there is no reason not to. Detailed reporting can be derived from this information and you can determine the true value of your customers.

Incoming information includes; orders, returns, “take me off your list,” “do not email me,” “do not call me,” change of addresses, survey information, etc. Again the more you have and maintain, the better.

All this information, literally at your fingertips, gives you the knowledge to understand the what, why, who, when, and how much and makes marketing decisions easier. The key is to have a platform that allows you to do all of this. We will elaborate in later blogs.

Gary Sierzchulski, VP, Arandell Data Services

Well, as you all know, the USPS is strongly considering offering a discount this summer if you increase your circulation over the same period of time last year.  While this is a great step for the Postal Service in starting to finally recognize the needs and issues of catalogers, it should by no means be the key factor in deciding whether or not to increase prospecting. Right now, regardless of an incentive, this is the best time to build your brand. Consider the following reasons:

•There are fewer catalogs in the mail right now so yours will likely get more attention and have less competition than at any time since after September 11, 2001. Making it smaller and cheaper does not necessarily mean it is better. Will making your retail store smaller and “cheaper” bring in more customers?

•If you believe many of the economists, there are signs and reports beginning to show that consumer confidence is coming back. Again, this is a great time to position your brand, show the consumer that you are still out there and demonstrate that you are in a position to offer value. You need to be ready when the consumer is ready!

•We all heard about the consumer’s lack of loyalty. Many of our analyses, however, show that if you communicate with your customers by telling your story and creating value and positive feelings on a regular basis using all channels, they will be there for you and will be less sensitive to discounts.

•Your house files are shrinking, or at best, remaining stagnant. As we all know, this cannot be the case for much longer. You have two choices; increase prospecting effectively or lose market share and see your business decline. We have seen many catalogers go out of business in part to this short-sighted approach. Don’t forget; prospecting also means contacting inactive customers in your file who have done business with you in the past. Consumer tastes, interests, lifestyles, etc. constantly change, and in the past year, many have changed multiple times.

•The tools and approaches that are available to help you accomplish this are more effective than ever. They are also more complex, mainly due to the fact that we now have to consider multiple channels, contact frequency, lifestyle changes, etc. These are all part of a complex equation that can be solved with assistance from your direct marketing partners.

•Use all channels to communicate with customers. The king is not dead.  Catalogs still continue to be THE driver for sales in almost all analysis we do. More than ever, however, customers are receiving, expecting and wanting to be contacted from various channels, so you need to make sure you’re hearing what they are saying and responding accordingly.

Now is the time to get back into the game regardless of a postal incentive. We can help you to do it right by taking a systematic approach; analyzing what has worked or hasn’t worked in the past and developing a strategy to gain market share. It is not a race, but if you don’t get to the starting line soon, you will be left behind. And by the way, if any of you have tickets for the August 29 Buffett concert I’m interested.