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Why Giving Away the Catalog Is A Good Idea!
-by John Sanpietro Certified Professional Development Coach Stamping Is My Business!
The following was posted on 6/6/07 as a response to various comments on SUDSOL about the wisdom of giving out the catalog.
Hi
everyone, Every
year when I suggest giving the catalog away for free, it stirs up a
hornets nest of conversation and controversy.
Of all of the things I say, this is the one that meets the most
resistance, even from some of my most supportive clients.
So, I wanted to take a break from “stuffing
my pockets with your $5 bills” (my new favorite comment, by
the way J)
and take some time to write this to make sure you understand the idea in
full, and the reasoning behind it. This
is a lengthy post, but I would ask that you take a moment to read it in
its entirety. The
question is… why? Why does
the idea of giving away the catalog strike such a nerve?
I
believe the answer, quite simply, is money.
Purchasing catalogs and giving them away costs you money.
And its ‘in-your-face’ spending.
Its much more obvious spending than a couple of extra stamp sets.
And parting with money for something as boring as the catalog (as
opposed to product) is tough. Also,
some of you have so many customers that the thought of giving each one of
them a catalog seems like it would break the bank. In
other words, most of you are looking at this from the beginning as a
losing proposition. You
look at this idea and assume
you’re going to lose money doing it.
Negative thinking at its finest.
And why? Because,
whether you realize it or not, you’re probably comparing it to your
experiences with the mini-catalogs. Most
of you send out mini-catalogs to most or all of your customers each time
one becomes available. And
most of you lose money doing it.
Your customers don’t call you and place orders when they get the
minis in the mail. So, if
you’re losing what you’re losing on the minis, imagine what you would
lose if you gave away the main catalog, right? Wrong! The
mini-catalog isn’t a losing proposition.
Most of you make it a losing proposition because you’re not
handling the distribution properly.
Let
me ask you two questions:
I’m
betting most of you answered ‘yes’ to question 1, and ‘no’ to
question 2. THAT’S why
you didn’t make any money on the minis.
Because you passively waited for your customers to call you, rather
than actively reaching out to them. There
were plenty of people in your customer base who would’ve made a
purchase… if you had called them. They
just weren’t so excited that they were going to pick up the phone and
call you. You
have to remember that your customers don’t treat this the same way you
do. They don’t sit by the
mailbox waiting for the new catalog like you do.
They don’t clear their day when the catalog arrives so they can
slowly browse it page-by-page putting together their order.
The mini catalog probably arrived in their mailbox with fourteen
other pieces of mail that day… including three other catalogs.
Unless you pick up the phone to call them, many of your customers
don’t even remember getting the mini by the end of the day. And
so, given the lack of orders the mini generates, its understandable that
you’d be reluctant to do the same thing with the IBC. So,
what are you doing instead? You’re
making your customers jump through hoops to get your catalog.
They either have to book a workshop, spend a certain amount of
money, or out-and-out pay for it. In
other words, before your customers can have the catalog to do business
with you, they have to do business with you!?
I know a lot of you don’t want to hear it, but that defies all
business sense.
I spend hundreds of dollars per month in marketing. I give away
several hundred dollars a month in referral rewards and Card of the Month prizes.
For most businesses, including mine, marketing is a big part of
their budget. But very few
businesses would ever consider holding back their products or services
until a customer or potential customer paid a premium.
Think
about it in terms of my business… What would happen if I started
charging you or making you do something BEFORE I let you know what
products and services I offered? A
handful of you, who were really into what I have to say, would do what you
had to do to find out what I’m offering.
Most of you, though, wouldn’t do business with me.
If you look at your customer base, and the percentage of people who
have bought something over the last six months, you’ll probably find a
similar scenario occurring. Think
about it… How many other companies’ catalogs have YOU bought in the
last six months? The
catalogs are a cost of doing business.
They’re marketing tools for you.
And even though you may think you’re saving money by not giving
them away or (even worse) selling them at a profit, you’re actually
losing money because of all of the sales you’re not generating from the
customers you’re not giving catalogs to. Its
been implied that I would never give away catalogs if I were a demo.
However, I assure you, the first thing I would buy every month was
another box of catalogs to give away.
I know a lot of you are stuck on the fact that they cost $4 each,
but in business, you sometimes have to spend money to make money.
This is one of those times. Besides…
they only cost $4 each! They’re
a fantastic investment! For
$4, you’re handing a customer hundreds of stamp sets, and accessories,
and more! You only have to
sell $12 in product for every catalog you hand out.
That’s half a stamp set! When
you think about it in terms of ROI (return on investment), 5 catalogs for
$20 is a much better investment than a $20 stamp set.
In order to make my money back on the catalogs (containing hundreds
of sets), I have to sell $60 in product.
In order to make my money back on the stamp set, I have to sell $80
in product – and that product is limited to that particular stamp set. And
be honest… how many of you have sets that are retiring that you’ve
never showed to your customers? Each
of those sets represents money you could have put somewhere else.
How much do you spend on swaps?
I’m not attacking swaps, but if you’re willing to spend a
couple of hundred dollars on swaps, shouldn’t you be willing to spend
the same amount on catalogs? In
many cases, its not a matter of spending extra money…it’s a matter
of reallocating the money you’re already spending to something with a
more profitable return. And
handing out the catalogs is profitable.
As long as you do it the right way.
I’ll detail what I believe is the right way after this next
section. Let’s
take a look at some of the common responses/answers/solutions I hear from
SBO’s (stamping business owners) on this topic:
Technically,
yes. But its much more
important to you as a catalog than to your customers as an idea book.
Your customers don’t need the IBC to find ideas.
You, however, need your customers to have the catalog in order for
them to buy from you.
Not
exactly. Your BEST customers
don’t mind paying. For the
customers who are buying and booking from you no matter what, they’re
going to get the catalog sooner or later, and if they have to do something
to get it now, so be it. But
what about the customers you aren’t doing business with?
Aren’t they the ones who REALLY need the catalog?
Let’s say you’re only doing business with 25% of your customer
base right now. What would
your business look like if you were doing business with 50% or 60%?
Find
a different incentive. Or
don’t offer an incentive at all. Frankly,
I think the ‘hostess benefits’ program is more than enough of an
incentive. The only reason
your customers want more is because you’ve trained them to expect more.
So, now you have to retrain them.
Again,
you’re making your customer jump through a hoop in order to see your
product line. The small
percentage of customers (your best ones) won’t mind.
But the much larger percentage in the middle (your casual
customers) aren’t going to go for it.
Again,
it may just be a matter of reallocating some money you’re already
spending on less profitable or unprofitable things.
However, if you follow the steps below, I think you’ll find it
will be VERY difficult to lose money. Here’s
how to give away the catalog without losing money:
If
you do this every time. If
you get the buy-in from each person and follow up with each person in a
timely fashion, you will not lose money!
Most
of you who have tried giving away the catalog in the past have lost money
because you didn’t follow up. You
waited for them to call you. If
you’re not going to make the call, don’t even bother! What
if they don’t say yes? Then,
you say, “no problem, but I hope you understand that I can’t give you
the catalog.” Is
everyone you call going to buy something?
No. Of course not.
Some people won’t even take your call.
But more than enough people will place orders to make up for the
people who don’t. AND
you’ll increase your sales AND your profit.
Remember, based on how much you make in instant income and volume
rebate, and assuming an average order is around $50, you only need one out
of every four people to place an order remain profitable. And since the average order
from a new catalog is probably higher than that, you don't even need that
many people. In all likelihood, though, you’ll have an even better rate of return than
you actually need… as long as you make the calls! Give
catalogs to the customers you don’t see first.
Call them, get the buy-in, put one in the mail and follow-up!
Give them to people in your classes.
Don’t worry about your best customers yet.
Your best customers are actually the people who need the catalog
the least! They’re
going to buy from you whether you give them a catalog or not. The
only people you don’t want to give the catalog to this way is workshop
attendees the night of the workshop.
They’re already looking at the catalog and its unlikely that
they’re going to place an order three days after they placed their
workshop order. It may also
hurt workshop sales, which won’t make the hostess too happy. For workshop attendees, let them know you'll follow up with them shortly after they receive their workshop order and make arrangements for them to receive their catalogs at that time. If
you follow these steps, including the follow-up call, you’re
going to increase your sales without having to lift a finger to find new
customers. Remember, it’s a
lot easier to sell to a repeat customer than it is to find a new one.
Generate the repeat business you deserve.
Try and get past the money you’re spending and focus on the money
you’ll be making. Thanks
for taking the time to read this. If
anyone has any questions, please feel free to e-mail me at john@stampingismybusiness.com. Warmest
regards and much success, John John
Sanpietro Personal
& Professional Development Coach Stamping
Is My Business! Phone:
518-576-6161 Member,
International Association of Certified Coaches
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