Classic Car Parts Marketing

May 14 will be a dark day for US catalogers; that’s when the industry gets hit with the largest postal rate increases in recent history. What can you do about it?

I wrote a piece on this subject a couple of months ago, but it was for a more “conventional” catalog audience and some of the actionable items won’t apply to typical automotive parts catalogs. Here’s why: conventional catalogs (think LL Bean or J Crew) rely heavily on rented prospect lists for their customer acquisition efforts, and this doubles the circulation of many of their mailings. The “yield” from those mailings is very low, with response rates generally down near 1% and sales per catalog of only $.80 - $1.40 or so. The result is that catalog costs for these “typical” catalogs can run as high as 25 - 35% of sales.

On the other hand, classic car parts catalogers typically mail only to existing customers and catalog requesters — and catalog costs may be as low as 5-10% of sales. If you’re in this category, count your lucky stars; the bottom-line impact of the postage increase will be much lower for you. And if you use a heavy, 100+ page book, you won’t see as much increase (in %) as those with catalogs under 3.3 ounces. (Unfortunately, however, the increased discounts being offered to large volume mailers won’t be of much use for those with circulations under 100,000 or 200,000 per drop.)

It’s not hard to find experts who recommend that catalogers switch some or all of their mailings to a narrower trim size, often called “Slim Jim” in the printing industry. These books usually measure 6″ x 10.5″ and, to meet the letter-rate requirements that spawned them, must be “tabbed” shut with two adhesive wafers.

Under the current (pre-May 14) rates, a 3.3 oz. tabbed Slim Jim catalog costs 25 - 30% less to mail than the same weight catalog in a traditional size, which the USPS puts in the Flats category.

After the May 14 increases, that same, tabbed Slim Jim’s postage will be cheaper by 35-45% (there’s a range because of variations in sortation and destination delivery). That’s what’s getting everyone’s attention!

But … how much would you damage response rates by changing your mailing format (thus tampering with your “brand”)? How much would you hurt sales by “daring” someone to open a catalog sealed shut with adhesive wafers? Some products “fit” the format better than others. Since so many catalogers are rushing to the tabbed Slim Jim format (the printing industry is working overtime to have the equipment in place), these questions will be answered in the next six to nine months.

Meanwhile, instinct tells me that Slim Jim response rates will usually be lower … and order curves will be shorter because these catalogs seem like “throwaway” pieces.

technorati tags: letter-size catalogs, postage increase, Slim-Jim, catalog cost, response rates

Technorati Tags: catalogs, slim jim, letter rate, postage increase

This entry was posted on Friday, May 11th, 2007 at 7:32 pm and is filed under Marketing Ideas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.