Paying a premium

First there was Amazon Prime, then came Asos Premier, now M and M Direct has launched its Premier service, offering customers free express delivery, free returns, priority mailings and exclusive offers.
Amazon Prime, Asos Premier and M and M Direct Premier are membership programmes that charge customers an annual fee for added-value services. Amazon’s service costs £49 a year; Asos currently charges £14.95 and M and M Direct charges £14.99 as an introductory price. But do they represent good deals for the merchant and the consumer?

I looked at joining Amazon Prime, but could not see any immediate benefits as a consumer. Sure, I could get “free one-day delivery on millions of eligible items sold by Amazon.co.uk”, but what about the items sold by third-parties on the site; not all of those are eligible. Not to mention that most items are eligible for Amazon’s free super-saver delivery anyway. I may have to wait up to five days to receive my purchase, but if I wanted it sooner I’d pay the one-off delivery charge. For most items I am happy to wait a few days. Although my family buys a lot on Amazon, I don’t think our shipping costs rack up to £49 a year. Thanks, but no thanks. This offer clearly works out better for Amazon and if people are willing to pay £49 when they could get a very similar service for free, Amazon is definitely the smartest marketer out there.

The Premier offer from apparel etailer Asos is instantly more enticing for consumers. It offers free next-day delivery as well as a returns collection service. I can see the immediate attraction of not having to trudge to the post office to return a parcel. Another benefit, at least for a catalogue nut like me, is that Asos will mail its customer magazine to Premier customers each month. I have bought from Asos a couple of times over the past year or so, but they’ve not sent me a magazine for several months. I was told by a customer services rep that “we send out the magazine every month to a random selection of people who have ordered from us in the last six months. This means that if you keep ordering from us you will receive the Asos magazine,” she directed me to the online version, but it’s just not the same. For £19.95, or even the full price of £24.95, the Asos Premier deal is much better than Amazon’s. As Asos already offers free delivery with no minimum order value, albeit not next-day, I guess the Premier service is a way to reclaim revenue from deliveries. It’s also a great way for Asos to communicate directly with its very best customers. Plenty of online retailers can segment their databases to find out who among their customers buys the most often. But using a service like Premier, Asos knows exactly who its most engaged customers are. To use a much-bandied term, the people who subscribe to a service like Premier are likely “brand advocates”, willing to pay extra for a service from their favourite retailer. Impress these people and they will tell their friends, who may then also join the service, who will tell their friends, and so on.

M and M Direct’s offer is very similar to Asos. It includes free express shipping, free returns, “priority mailings” and exclusive offers. Already, M and M says 50,000 people have signed up to the programme since March. Again, like Asos, M and M calls out receiving regular catalogues as a key benefit. Its non-offer price is £19.99, cheaper than Asos’s full price. The real added benefit here is that M and M Direct normally charges £6.99 for express delivery and £3.99 for standard delivery compared with Asos and Amazon where customers can opt for free delivery on most items. That means that the service essentially pays for itself after just two orders. For regular shoppers, that’s a very tempting deal.

If I genuinely shopped that often with a retailer, paying for a premium service would definitely appeal. It’s a concept that would work for anything purchased regularly--pet supplies, vitamins and supplements, home-office supplies, childrenswear and baby products, and so much more. If margins permit, we may see many more of this premium services crop up. After all, there’s nothing customers love more than being treated like VIPs.--MT

December Catalogue Log

Despite the snow, which disrupted mail services across the UK in the run-up to Christmas, we still received more catalogues in December 2010 than we did in December 2009. But before you get excited and herald this as a triumph over the elements, we only received four more catalogues—66 compared with 62.

The figure also represents a considerable drop from the volume of catalogues we logged in November 2010, when we received 167 catalogues. Another significant contrast is that December’s crop of catalogues was much more promotional than the previous month, with 62.1 percent of front covers making a mention of a special offer, compared with less than half of the November covers doing so.

No prizes for guessing what the most popular offer was in December. Once again, sales and discounts featured most prominently, on the cover of 29 out of 66 catalogues. Many cataloguers, it seemed, did not want to wait until January to start their sales: step forward Charles Tyrwhitt, Craghoppers, and JoJo Maman Bebe.

The percentage of catalogues offering free delivery in December was up marginally on November--21.2 percent, compared with 18 percent. The percentage of catalogues promoting a free gift on the cover fell from 8.4 percent to 6.1 percent, or just four catalogues out of 66.

And finally for December’s haul of catalogues, you may wonder what discount apparel retailer M and M Direct, audio/visual cabling supplier Russ Andrews, and plants catalogue Thompson & Morgan have in common. These three catalogues were the only ones we received that made a promotional opportunity of the VAT rise. Thompson & Morgan pledged to hold 2010’s prices, while Russ Andrews promised to keep VAT at 17.5 during the sale period. M and M promised no increase until 12th January. Whether we’ll see more of these promotions in January is debatable--already our tracker has logged some catalogues doing so. Though with two of the examples holding prices for just a couple weeks and leading retailer Next openly admitting it is increasing its prices by approximately 8 percent this year, it won’t be a popular promotion for long.--MT

The Catalogue Log by the numbers

To be in mail order, you’ve got to love data, so here’s a roundup of Catalogue Log stats from 2010 just for you:

• In total Catalogue e-business logged in 1332 catalogues in 2010. That’s 144 fewer than we received in 2009, representing a 10 percent drop.
• Once again September was the month with the greatest volume, when a total of 185 catalogues were tallied. In April we received just 61 catalogues.
• In August, just 34.4 percent of the catalogues we received made no mention of a special offer on the cover. The least promotional month was November, when more than half of covers featured no special offers.
• July saw the highest percentage of catalogues promoting a sale or discount on their covers, 49.5 percent. In contrast, November touted the fewest price-related offers, just 27.5 percent.
• Free delivery was most popular in September, promoted on 24.3 percent of all covers. It was least popular in July, with only 12.1 percent of catalogues offering some sort of free p&p offer.
• We also tracked how many catalogues offered a free gift. The promotion was particularly popular in May, when 1 in 5 of the catalogues we logged in promised a freebie on the front cover. Free gifts were least popular during the festive season—only 6.1 percent of the catalogues we received in December gave away a gift with purchase.
  

Email 101: Getting the basics right

Last month I was at an Ask the Experts conference organised by postal advice and management company Onepost. One topic that came up in most of the sessions was email and how to get the most from your email marketing efforts.

One delegate said that for his first foray into email marketing he used a rented email list and failed to generate a single response from it. The delegate insisted that the list was clean, legal and that the named contacts on it were the most relevant to his business. But I was baffled; what concerned me was that the whole campaign was based on the rented list when, as he's been in business for almost 20 years, he should have had a list of his own existing and prospective customers. Where was his housefile; why didn’t he know anything about his customers; was the copy all wrong; was the timing out of whack?

It was almost enough to put him off email for life. What he needed was Email 101, some back-to-basics advice on email marketing. As the day went on, I realised he wasn’t the only one. Several of the delegates were new to the sector and were keen to learn the tricks of the trade. To help them—and others in their position—get the most from email, below are some tips gleaned from the day and some suggested further reading from the Catalogue e-business archive.

1. Build your own list
Supplementing a mailing with rented names is standard practice in catalogue marketing and it can work in email too. However, a catalogue business should be building its own email list of current customers instead of relying on a rented file.
If you’re just moving into ecommerce after trading via bricks-and-mortar stores, for example, start capturing customer details in-store. If you mail a print catalogue, send a postcard or flyer asking for customers’ email addresses, you can even incentivise this by giving email subscribers 10 percent off their next order. To further grow your list, you can ask customers to send you their friends' details too. M and M Direct does this by including a Freepost postcard within its catalogue. If you trade online, make your email sign-up box clearly visible and be mindful not to ask for too much information at sign-up as this may put people off. Once you have a list of people you know are interested in what you’ve got to say, your emails are more like to elicit a response.
For more info see How to bolster your email list.

2. Subject line
At the conference, Dan Croxen-John of Applied Web Analytics advised email marketers—novices and experts—to test all aspects of an email campaign. Among the elements he suggested looking at were subject lines and personalisation—such as including a first-name salutation vs last name vs no name in the subject line.

There is still some debate about whether the word Free in the subject line will get you flagged as a spammer. It’s probably best to avoid it if you are new to email marketing and have not yet established a good reputation.
For more about testing subject lines and what else you should measure take a look at Five tips for better email testing.

3. Maximise your deliverability
Working with a good email service provider (ESP) is more likely to get your email whitelisted (the opposite of blacklisted) and past the spam filters. You can also improve your chances of being added to recipients’ whitelists by having a recognisable “From” field—this is usually your company name or the brand your customers will know you by.
To find out about improving deliverability see Ten tips for improved email deliverability.

4. Timing
According to speaker Mike Broomfield from digital marketing firm Intellegentia, getting the timing of your email right can reap great rewards. For business-to-business marketers, Broomfield suggests 11am on a weekday is a good time as most workers will have cleared their morning emails and attended their early meetings. For consumers, a lunchtime offer can work—Wallis recently sent me an email promising free delivery if I ordered between noon and 3pm on a specified day. You may also have noticed as a consumer that you’re being sent more emails at the end of the month and that “pay-day offers” are becoming much more prevalent. But get the timing wrong, and your efforts will be wasted. As always, the best advice from the experts is to test different timings and see which works best.
Here are Six common email marketing mistakes--and how to fix them

5. Content
None of the above tips will do much good if your copy and offers aren’t up to scratch. Think carefully about what you want your emails to say, and craft them with your customers in mind. Do you know what they want from you? Again, the experts recommend testing offers and copy before sending the email to the entire list.
You might also want to consider your image-to-copy ratio. Consider whether you have enough images, or too many. Do the images distract from the message? What does the email look like when images are disabled in a recipient’s inbox?
For more advice on design see Seven tips for improving your email design.--MT

May Catalogue Log

Having recently finished putting together the Multichannel Year Book commemorating the winners of the ECMOD Awards for business excellence in 2009, I noticed many trends among the winners. Most notably, those that were most successful had learned to do more with less. Amongst other tactics, it meant reducing circulation, frequency, or pagination of their catalogues and experimenting with different formats. This maxim has continued through to 2010; last month’s Catalogue Log recorded half the volume of catalogues compared with May 2009.

There could be a number of reasons to explain why we’ve received fewer catalogues last month compared with a year ago. It could be that cataloguers are simply mailing less this year, or that we’re not bringing as many copies into the office from home compared with last year. Or it could be that mailers see us as tyre-kickers, and are mailing smarter, choosing to omit our prospect names from their files.


This theory could also explain why most of the catalogues we received (61 percent) carried some sort of promotion on the cover: They were pulling out all the stops in order to get us to spend. The most popular offer was a sale or discount (32.5 percent) as used by Cath Kidston, which inserted its full catalogue into Easy Living’s May issue carrying a 15 percent discount for the magazine’s readers.

Sales and discounts were also highly prominent last May—42.6 percent of catalogues featured some sort of price-related promotion on their covers this time last year—but it’s come as quite a surprise that in 2010 free delivery and free gifts were more than twice as popular. This year, 24.1 percent of catalogues promoted free delivery on their covers compared with a mere 11 percent last year. Whilst a number of cataloguers, including apparel merchant Lands’ End and discount-fashion catalogue M and M Direct, set a threshold requiring customers to spend more than a certain amount on their order, less fussy was water gardening cataloguer PondKeeper, which offered all customers free next-day delivery.

Plus-size apparel retailer Evans sent us two catalogues in May. The catalogues had the same cover image but carried two different offers. One promoted free delivery on orders of £40 or more, the other gave us 20 percent off our next order. The free delivery offer was sent to an existing customer whilst the discount was aimed at the prospect.

May 2010 saw a record number of catalogues offering a free gift (20.5 percent). The highest percentage up until now was recorded in June 2009, when 17.8 of catalogue covers promised a free gift. In May 2009, the figure was just 11 percent. Freebies promoted in consumer catalogues ranged from a raincoat and reversible fleece gilet from Daxon, to a free LED reading lamp for Daily Mail readers from Clifford James.--MT

December Catalogue Log

Each year we read that consumers are waiting later and later to complete their Christmas shopping. But marketers are apparently not waiting till the last minute to send their catalogues. In December we received just 62 catalogues, the lowest volume of any month in 2009 except April. (And I’m sure that the scant 40 catalogues we tallied in April was some sort of aberration. Gremlins must have swiped the bulk of our post that month so that they could order more spanners to throw into works.) By way of comparison, in November we received more than twice as many catalogues—140.

Half of the December catalogues made no mention of special offers on their covers or in their covering letters. This is a statistically insignificant increase from the 49.3 percent of November’s catalogues. What’s more the percentage of free delivery and gift-with-purchase offers declined. Whereas 19.3 percent of the November catalogues advertised free P&P, just 12.9 percent of the December catalogues did. Likewise, 14.3 percent of the November catalogues touted a free gift, compared with 6.5 percent in December.

These numbers might lead you to believe that fewer marketers felt the need to reduce their margins in order to gain sales from procrastinating Christmas shoppers. But the percentage of catalogues offering sales and discounts refute this: 37.1 percent of the December books boasted of discounts and similar offers, up from 31.4 percent in November.

Only five of the 62 catalogues prominently displayed their order deadlines for Christmas delivery. Maybe that was because most of the cataloguers didn’t have particularly user-friendly deadlines. Knitwear mailer Wolsey, for instance, gave noon, 16th December as its cut-off date—not much of a help for last-minute shoppers. Discount fashion mailer M and M Direct had the latest deadline: midday on 22nd December.

Conversely, Argos targeted early birds with its Furniture Sale insert, which let customers know that the sale began on Christmas day.

Now, as a treat for the wonks amongst you, a few year-end statistics. In total, Catalogue e-business logged in 1,476 catalogues in 2009. September was the month with the greatest volume, a back-breaking (for the posties) 212 catalogues.

May saw the highest percentage of catalogues with prominent sale or discount offers, 43.7 percent. The March books, meanwhile, were the least likely to boast of discounts and price cuts, with just 28.1 percent doing so. For all of 2009, 523 catalogues, or 35.4 percent, made a point of promoting discounts and sales.

Free delivery was most popular in October, with 21.7 percent of the catalogues offering it, and least popular in February, when only 7.3 percent offered it. For the entire year, 219 catalogues, or 14.8 percent, offered conditional or nonconditional free P&P.

Slightly less popular as a promotion was the gift with purchase. All told, 191 of the catalogues received last year, or 12.9 percent, offered it. June was the most popular month for free gifts, when 17.8 percent offered them.--SC