we discussed how catalogs can be used to win more business, connect with your customers and enhance your bottom line results.
With less than 10% of the active vendors supplying 80% of your customers' product requirements it is imperative that your catalog help you compete for "preferred status" with the buyers of your products. In addition, your catalog needs to streamline the buying cycle by cutting out inefficiencies, omissions and lost opportunities.
What it means?
Over the next few issues of The Bottom Line we'll investigate not only how to start your catalog project with a plan but also how to finish it on time and on budget. These ideas are based on Webcom's experience helping many catalog publishers just like you compete and win by better connecting with their customers.
The Takeaway.
Start with a well thought out plan that includes: i) a look at your markets; ii) a budget; iii) the content plan; and iv) achievable milestones and timelines.
The Bottom line.
You want to deliver your catalog to the right audience, through the best media channels (print, CD, online) in order to maximize the impact of your catalog investment. Starting with a plan will help you stay on schedule and within budget. It also helps you measure the success of the catalog in helping achieve your business goals.
WHERE TO START?
The planning phase of any catalog project is critical to its overall success or failure. Success is measured by your catalog's ability to drive new business by acquiring and retaining profitable customers, streamline your sales cycle and standardize your product offering. The old adage "failing to plan is like planning to fail" certainly holds true for catalog publishing. There are three areas where company resources get stretched in the catalog publishing process.
Market Assessment. The outcome of this exercise is a better understanding of the "hot buttons" for your customers and formulating catalog ideas that successfully help leverage them into real opportunities.
- Best way to broadcast your message. The fervor over E-commerce these last 3 years created isolated success stories and many examples of failure. The reality is that there are real and significant benefits to be gained through an online strategy. The foundation of any E-commerce strategy must be the catalog content. It is therefore important to understand how your current investment in print catalog publishing can be leveraged into an online benefit today or down the road.
- Segmenting your message for specific markets (or similar customers) has proven to be an effective strategy to increase the sales conversion rate while also managing costs. Growing market share using personalized or custom segmented catalogs can be a sound strategy to support Integrated Supply contracts, maintaining relationships with Tier 2 customers and direct mail-order.
- Customer profiling allows you to determine your most profitable customers and strengthen relationships with all customer regardless of purchase volume. For each of your A, B and C customers you can use a catalog to build stronger more profitable relationships.
Budget. A catalog is a significant investment in the future success of your company. Too often the budget does not account for all the real input costs:
- Production costs. These include the costs to prepare the content of the catalog in print or Web ready file formats. Usually this is a highly manual process with significant labor costs. It is an area where unplanned costs can quickly add up should factors such as design impact the manufacturing cost or poor file preparation require extensive rework. A typical average cost for the production phase can be $125 to $150 per page.
- Printing costs. These costs are largely driven by how many catalogs you want to print and other factors such as paper, colors, page count, covers, etc. On average catalog print costs are between $40 to $75 per page.
- Distribution costs. Your catalog is only valuable in the hands of your customers and prospects. Whether you intend to have your sales reps deliver the catalogs or you plan to mail them out, creating a distribution plan prior to the launch of the catalog helps you get the catalog in the market so that you can quickly start to see results.
- Developing a cost recovery strategy. Too often this is overlooked in the planning phase. Our experience has shown that it is possible to recover a significant portion of the catalog publishing cost from trading partners you support. Putting a concerted effort into this area will help you offset some of the investment in your catalog production.
Content Plan. Building the content plan will ensure that your catalog has an appropriate focus on your fastest moving and most profitable product lines. In addition, the content plan creates a framework for organizing your catalog content so that it is easy to navigate and find specific product solutions. The Content Plan should include:
- Section Hierarchy. This is like the Table of Contents in that it sorts products into a logical hierarchy of sections and sub-sections. Typically these follow an existing product categorization or classification scheme used in your ERP or business system.
- Manufacturer priorities. Not all manufacturers are created equal. Your preferred vendors should get (and pay for) preferential treatment in your catalog.
- Product standardization. Using the catalog to standardize your product offering drives profitability on the bottom line. On average about 50% of the orders you receive are for non-stock items. Sourcing and procuring these goods is far less profitable than supplying products from your inventory. Your catalog reflects your choice of the best products available for your customers and helps you standardize on products you keep in stock. Look for the 80/20 product lines and make sure they are front and center.
Timelines. The catalog production process requires inputs from many different levels in your organization – senior managers need to set product priorities and make key vendor selections, sales reps need to have input into critical success factors that will help them secure more business, product specialists need to help create and approve catalog content and your vendor partners need to help you focus on the 20% of their products that drive 80% of their business.
Setting milestones will help you keep on schedule and budget. With an average production cycle of 4 to 6 months, intermediate milestones help you measure progress and plan resources.
- Planning. Look at the big picture, quantify the opportunities and set stretch goals and clear objectives for your team to achieve. These should include top line (revenue) growth, bottom line (profitability) growth, customer acquisition targets and customer satisfaction measurements that are impacted directly through your catalog.
- Production. Do you want to do this in-house or should you partner with a Catalog Publishing specialist (like Webcom)?
- Printing. Manufacturing your catalog or hosting your online catalog needs to be handled by a professional organization that has a proven track record. Do your homework – you are always welcome to come and visit Webcom's facility to understand the scope of our operation. Click here to take an online tour of our facility.
- Distribution. Quickly getting your catalog into the hands of the requestors and decision makers will turn on the sales. In our July newsletter we looked at some Catalog strategies. Whether you want your reps to distribute your catalogs or you want to use our North American fulfillment services, Webcom can help you keep track of and keep in contact with customers who have your catalog.
- Measure results. Celebrate your successes by measuring the impact of the catalog against the goals and objectives set in the planning phase.
Look for the October edition of the Bottom Line where we will take a closer look at the content of your catalog – where to get it, what formats to use and how to organize and manage your content.
I didn't know you carried that product! Have you ever heard a customer say that? Let's look at the basics of publishing your catalog - a well thought out catalog plan. Planning your catalog project keeps it on schedule and on budget. It also helps you identify resource requirements and formulate strategies that drive business growth.
