Marketers, brace yourselves: Your postal rates could increase 22% this year or next, according to Hamilton Davison, executive director of the American Catalog Mailers Association.

Are you ready for a postage increase for catalogs by as much as 22% in the next year or two? Maybe no one can be really ready for an increase of that magnitude, but there are ways to brace for the inevitable. One way to minimize the impact of a major cost increase is to adopt contact optimization.

With contact optimization you choose the best catalogs for each customer, not the best customers for each catalog. This revolutionary customer-centric approach has proven to be very effective at removing wasteful mailings and shifting circulation to more effective choices, thus generating smarter contact strategies.

Typical catalogers can remove 10-20% of catalog costs from their annual marketing budget by eliminating unproductive circulation with minimal, if any, sales loss. The key is removing those excess catalogs not generating incremental revenue. Almost every cataloger is over-promoting its best customers.

Traditional cost-cutting measures are not as effective. Cutting circulation generally take one of two tracks: dropping the weakest catalogs or raising mail cutoffs. Both methods will cut costs and sales. The weakest catalog will include incremental revenue to at least some customers, thus cause a sales loss. Higher mail cutoffs tend to take catalogs from your more marginal customers who are likely not over-promoted, thus you lose their sales. You need to cut circulation that is not generating incremental revenue and that requires surgical removal of certain circulation from certain customers. Only contact optimization makes the precision decisions to cut costs and not revenue.

There is no better time to make your marketing more efficient and effective than now. With a 6-month test on 10% of your customers, you can verify the amount of waste and what its removal will do to your top line revenue.

About Randy Erdahl
Randy is an analytic marketing champion and is Clario’s Executive Vice President, Optimization Solutions and co-founder. As the executive leader of optimization solutions, he provides vision and direction for Clario Stream Solution development, as well technical leadership to sales, marketing and direct client interaction.