Archive: February, 2016
Are printed catalogs necessary? Can your sales continue to grow if you stop sending them? What can you do to find out?
An article in the Winter 2016 issue of TotalRetail asserts that catalogs are indeed necessary for direct response businesses, and that discontinuing them in favor of only internet marketing could reduce sales. In addition to explaining why, the article provides helpful tests and important questions to ask before eliminating or cutting back on catalog mailings, to help determine which move is best for your business.
Catalogs benefit businesses by attracting new buyers, they help to sustain repeat buyers, and are typically less expensive than paid search advertising. Testing is the key to knowing if and how your business can benefit from continuing to use them (or discontinuing them). Consider these tests and questions before you decide whether to change or continue your catalog distribution:
- Compare the number of new buyers resulting from catalogs versus sales from non-catalog sources.
- Determine the difference in sales from customers who receive catalogs and those who don’t.
- Determine the opportunities for profit using internet marketing, and how they compare to profits from catalog sales.
At the very least, catalogs accomplish a big marketing goal. It’s pretty powerful to say your brand is present in a customer’s house!
We know how hard it can be to attract new customers, which makes it so important to keep your current customers. Not losing customers can be as easy as sending Email messages to keep in touch.
- When a customer first makes contact, start at the beginning of the relationship with a welcome message as soon as an account is created or after the first purchase. The customer reached out to you with that purchase – acknowledge it and say thank you. Offer to be available for help when you’re needed.
- After each purchase, ask for a review of both the shopping experience and the product. This lets the customer know that you still care even after the sale. Make sure the product was received and the customer is happy with it. Ask for a referral to a friend, offering a discount or coupon for the favor.
- If a customer hasn’t ordered in awhile, simply reach out again with an Email – this time, offering a discount may provide a smart incentive for additional purchases.
Using InOrder’s List Creation features, send messages often enough to control the quantity of results, and use promotions or campaigns to control the frequency of messages.
- Remember to recover any abandoned carts. When customers (and potential customers) leave items in their carts, messages with links to the carts can help guide shoppers to checkout. A series of 2-3 messages at specific intervals provides subtle reminders that keep you in mind.
It’s well-known that consumers research businesses and products before they buy. In fact, this study reports that 85% of consumers use online reviews for their research. Bad reviews are used as well as good reviews, telling both pros and cons of a product or business. Additionally, this research explains that, when negative reviews are included with the good reviews, they can increase consumer trust and contribute favorably to conversion.
Such high numbers reveal that it is beneficial to your business when customers provide honest opinions about your products.
Google recognizes the benefits of ratings and reviews, and you can encourage Google to show them with schema markup. (While you’re reading about schema markup for ratings and reviews, be sure to also check out the details for using markup for your products.)
After a customer’s order is delivered, send a series of Email messages that thank the customer and ask for a review. Our experience shows that these Email requests with a convenient link to the product page results in far more reviews. Be sure to provide links that are as convenient as possible, and format your review page so it is quick to submit.
And finally, if your customers take the time to send their valuable opinions, make sure to review and display them as soon as possible!
Inventory management has come a long way. In today’s fast paced, Internet-connected world, customers are not willing to wait for a product to be “made to order,” and then shipped in six to eight weeks. They expect it much sooner. This creates the need to stock the product in the warehouse so it is available for immediate shipment when an order is taken. When one firm offers rapid delivery by carrying stock, competitors are generally forced to do the same. And so goes the path of improvement for both businesses and consumers. You want your business to be the one in the lead. Here are five lessons you can teach your competitors about inventory.
Lesson 1 – Keep Fill Rates as High as Possible
If stock is depleted from the warehouse, and a customer’s order cannot be filled within a reasonable or requested amount of time, the customer will often cancel the order and then re-order from a competitor that has stock available.
Lesson 2 – Preventing Attrition is Critical
Once a customer switches to a competitor, it may be much harder to get future orders from that inconvenienced customer. You don’t want to lose the repeat customers that you worked so hard to build up over time.
Lesson 3 – Increased Order Cycle Time Increases Shipping and Fulfillment Costs
For customers who are willing to wait out the backorder fulfillment process, shipping and fulfillment costs will be higher, especially if the order requires partial shipments as stock becomes available. Delayed shipment notices may need to be sent to customers, and the liability for unearned cash prepayments with backorders must be tracked. The cost of filling separate backorders may exceed the profit of the original order, and the only remaining argument for filling the backorder will be to prevent customer attrition.
Lesson 4 – Inventory Turnover is Important
Inventory turnover measures the performance of your investment in your inventory. Carrying too much stock in the warehouse puts a burden on an organization’s cash flow, which can easily outweigh benefits that may be offered for “ordering in bulk” in excess of near-future demand. Carrying too much stock on hand also increases the risks of theft, damage, and obsolescence to inventory on hand during long-term storage.
Lesson 5 – Accurately Forecasting Demand is Critical
Obviously, forecasting is vital for keeping your inventory investment as low as
possible without negatively impacting fill rates. The ability to forecast customer demand accurately is advantageous for obvious reasons:
- It improves customer satisfaction.
- Shipping and fulfillment costs are reduced when orders can be shipped complete at once.
- Inventory quantity on hand is more level, which controls costs and reduces the risks associated with carrying excessive inventory quantities.
Demand forecasts developed within the inventory system must be generally consistent with planning numbers generated by the marketing and other departments. However, your ERP system must use inventory forecast methods that are proven most useful with inventory systems, rather than forecasts generated by marketing or budgeting departments. It is important that inventory forecasts be made by SKU, by warehouse location, and by time unit. Merchandising managers may perform SKU forecasting based on demand history, and market managers may perform forecasting based solely on the predicted sales curve of catalogs. If the marketing department is planning an unusually big promotion and expects to sell three million units of an otherwise unpopular product, and the merchandising department forecasts project a total demand of only one million units, senior management must reconcile these very different visions of the future. While you may influence your customers with pricing, catalogs, and promotions, customers ultimately will order what, where, and when they desire.
The heart of an organization’s forecasting success is knowing how customers will order. The best way to control inventory to your advantage is through an ERP system that plans for future actions of your customer base.