November 28, 2006
Case Study
SUMMARY:
For many successful ecommerce sites, launching into a print catalog seems like the next easy step to ancillary profits.
But, as anyone in the 100+ year catalog industry can tell you, creating a printed catalog that converts consumers into buyers is incredibly difficult. Here's a real-life story of a catalog that failed ... and how the marketing team turned it around with an extreme redesign:
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CHALLENGE
"I remember meeting with a peer who did catalogs when I was doing online marketing for Schwan's and thinking, 'Man, how boring catalog marketing must be,'" laughs Glenn Bader, Schwan's Director of Emerging Channels.
That was before management asked him to develop a catalog offshoot to promote holiday 2003 gift sales for their Impromptu Gourmet ecommerce division.
"It seemed kind of odd to go from online to print," Bader admits.
He knew little about offline aside from the fact that production cycles were hideously long compared to the speed of search or email. So, he turned to a traditional offline agency for help.
The slender catalog promoted about 20 separate food items ranging from fancy entrees to luscious desserts as potential holiday gifts.
Results? "It wasn't performing at the rate we wanted," Bader says diplomatically. In fact, the catalog was so much of a bomb that he decided to go back to the drawing board and rethink the project from stem to stern before the holiday 2004 campaign dropped.
CAMPAIGN
Bader and his team started their project first thing in the new year so they would have plenty of time to get the catalog right.
Step #1. Ask them why they didn’t buy
Rather than guessing what was wrong, Bader's team conducted focus groups with potential customers in four cities. "People loved the concept of Impromptu Gourmet, but when they saw the creative, they really beat us up. 'What you just said I like, but this isn't it. And, by the way, your prices are expensive.' It was a pretty brutal step back."
Step #2. Re-evaluate positioning and brand
What did consumers really want? Focus group participants agreed, "I do wish I made special meals for the people in my life more often, but I really don't."
Based on that revelation, Bader says, "we changed the whole brand concept. We don't sell food. We're selling an entire experience. So, in the catalog you're not going to sell a bunch of items and make people figure out you can order this and that to make a meal … this is now selling a complete experience."
Step #3. Yet more research
Again, Bader started with research, this time into proven best practices from the catalog industry. "We read every book, all the research, all the articles that we could learn from." Their four key areas of research were:
o Catalog Analytics
Bader wanted to be able to run tests with creative, offers and lists just as he would for online campaigns, but, first, he needed to understand the science of catalog analytics.
Biggest change? Swapping his short-term results perspective for a five-year goal.
"Each decision that affects per-book revenues this year impacts the next five years. You have to look at catalog merchandising strategy and price points to make each page deliver revenues and grow average order value (AOV) as well as my house file size from season to season. Every day-to-day specific decision has to be in a broader context."
o Prospect lists
The team researched which behavior patterns -- ranging from gourmet-food magazine readers to past kitchenware catalog buyers -- might indicate better conversions. "We realized half of Americans are catalog buyers and the other half aren't. You're wasting your money mailing to people who don't buy from catalogs."
o Agencies
"Ad agencies range from people who do a combination of everything including direct mail, or some that focus on creative and offline advertising, and catalog specialists. A typical creative agency will challenge your creativity but they won't necessarily understand the full aspects and metrics of your five-year business plan. We found we needed to tap into people who knew catalogs specifically."
o Eyetracking-based design
Although eyetracking has emerged as the red-hot tactic of online design over the past 24 months, it has a 30-year history in catalog marketing.
"We deployed everything that's been learned by a lot of catalogers' eyetracking tests. We learned the hotspots are your covers, front and back, and the pages two-three spread. The center spread also was very hot as was the area around the order form. From there, you go to the inside back cover."
o Integrating email
"I've read enough studies to show the impact of multichannel. The more channels a customer interacts with, the more loyal they are and the more they spend." Therefore, the team decided from henceforth, companion email campaigns would be included as part of every major catalog drop. They set up print seeds for the catalogs and pulled the trigger on a "look for it in your mailbox" email campaign when the first seeds hit.
Step #4. Campaign execution
The next catalog, holiday 2004, dropped in October using every best practice the team had dug up. Now merchandise offerings were complete "experiences," including all courses of a particular meal plus music to play while eating. Customers chose their desired experience, such as a romantic evening for two instead of just a rack of lamb.
The team decided to keep price points steady rather than discounting, because now they weren't selling something that could be comparison-shopped for at a local supermarket. An experience is more valuable than a rack of lamb, after all.
Plus, the team took the rebrand concept beyond the catalog to redesign two additional areas for future year's sales growth:
o New packaging
Before, items had shipped in plain boxes with industry-standard white Styrofoam packing. Now, the delivered experience started with the box itself.
"When the food arrives in a beautiful black box, your mouth drops open," explains Bader. "It creates this great impression. Inside is a little guide on how to plate the food to make it look pretty and help you choose wine. And it includes the dinner music."
o Retrained (and retained) customer service
"Customer expectation for this brand was so high that we had to devote ourselves to customer experience. We had to invest in our agents." The team created an in-house certification program for in-bound call center reps, as well as an ongoing product sampling program. You weren't allowed to answer detailed questions about a meal you yourself hadn't eaten.
In addition, to keep turnover low for these highly trained reps, the team made sure the top reps had the opportunity to advance in the organization. "Some of them move into coaching roles or see over other things. Our core people are very consistent. The people who were answering phones last year are very much active this year."
RESULTS
When Bader's team conducted post-holiday focus groups in early 2005, they were blown away by responses. "This time, it was fun. We had some raving fans."
Management was also delighted. "We saw such a radical improvement from season to season. Prospecting list response rates were a 500% improvement. Customer response rates were a 900% increase. It was dramatic."
"Our catalog orders now have an average order value than online."
Biggest surprise -- although the URL is on every catalog page and a big portion of names mailed are online food shoppers, many of the orders arrive via postal mail. "I am shocked how many people send us paper orders," says Bader. "It's funny, the marketing assistants on my staff come in with mail tubs full of order forms. I'm just smiling. I never would have believed it."
Useful links related to this article:
Creative samples from Schwan's Impromptu Gourmet catalog:
http://www.marketingsherpa.com/cs/schwan/study.html
J. Schmid & Associates - the catalog specialist agency Impromptu Gourmet now relies on:
http://www.jschmid.com
Impromptu Gourmet:
http://www.impromptugourmet.com
Schwan’s:
http://www.schwans.com
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