Question

Topic: Research/Metrics

General Catalog Statistics - Forecasting Success

Posted by stacey on 3/14/2014 at 8:39 PM ET 150 Points
I sell Downspout Safety Caps and recently participated in a 100K catalog test mailing. We sold 26 units in the first 4 weeks. Only .026% ... I realize direct mail campaigns can typically see a 1 - 5% response. First of all, are the initial numbers good, bad or indifferent and second, is there any way to forecast a longer range response from the initial 4 weeks? Do sales usually peak then drop off, or ramp up slowly and peak 5-7 weeks after the mailing?



Thank you in advance!

Best,

Stacey
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RESPONSES

  • Posted by Gary Bloomer on 3/14/2014 at 9:31 PM Member
    Might you be confusing "response" with sales? Might the ideal buyer for your product be found via licensing your product through downspout installers? Where else are you advertising your product?
  • Posted by stacey on 3/14/2014 at 9:57 PM Author
    I'm interested in forecasting sales based on the initial 4 weeks of 26 sales. I'm not familiar with the trending of catalog sales; as I mentioned, are most purchases made right after delivery or after the catalog sits around the house for awhile?

    I've spoken to a few downspout installers as well as gutter manufacturers. Liability seems to be the concern. For one, including a product to prevent injury is admission that the gutters are sharp and can cause injury and the second reason concerning liability is that the installers guarantee their work and they're afraid if the cap would fall off, they'd be liable to go back out to reinstall and that would be time consuming and costly. I've had them on my house for 3 years and they've yet to fall off.
  • Posted by Jay Hamilton-Roth on 3/15/2014 at 11:20 PM Member
    Do you have any other historical numbers from your company (of other offers, for example)? What was the offer for your direct mail - "here's something new to look at" or "here's a special limited time offer"? Did your offer clearly answer the key questions that people are likely to have about a product they haven't used before? Besides your home's experience, have you had them independently tested/validated?
  • Posted by koen.h.pauwels on 3/16/2014 at 2:25 AM Accepted
    Hi Stacey,

    Catalog response can indeed take a few weeks, as customers can easily keep a catalog around until it's time to buy the product. how frequent are the needs for Downspout Safety Caps?

    For an apparel and outdoor gear retailer, we found that sales response to catalog drop increased till week 2, and then decreased till week 4 to become insignificant (figure 9 in the Marketing Science Institute Report: https://www.msi.org/reports/building-with-bricks-and-mortar-the-revenue-imp...) I can perform this long-term sales response analysis on your data. For details, check out my book at www.notsizedata.com

    Cheers

    Prof. Koen Pauwels
  • Posted by telemoxie on 3/16/2014 at 7:08 PM Member
    you are starting with an assumption of 1 to 5 percent response. I'm not an expert on direct mail, but many people assume response rates (which is different than sales as noted above) of less than one percent.

    As you begin to collect data to understand your market and forecasts future results, I encourage you to experiment with different lists and or offers. Try changing headlines or graphics, or something and measure results. Over time you will have a lot more data and a much better chance for accurate forecasts.
  • Posted by stacey on 3/17/2014 at 3:34 PM Author
    Jay - The caps went out in a catalog mailing, so no offer or any copy on our part actually. Here is a link to the online ad for them: https://tinyurl.com/k9amgon. We've not had them independently tested, just through neighbors and following up with others who have purchased them.

    Koen - Caps only need to be purchased once, unless some one moves, changes landscaping or gutter colors.

    Telemoxie - since the catalog was put out by another company, I'm not sure how to measure response rates other than by the sales/inventory reports we receive.
  • Posted by mgoodman on 3/17/2014 at 5:19 PM Accepted
    I suspect there's no way to predict or project results. It's different for every catalog and every product -- especially when you consider seasonality and shifting consumer use of different catalogs.

    When you have a specialty product like yours, you pretty much have to just keep trying stuff and seeing what works, and then hoping the successful things keep working the same way when you repeat them in the future. The volume isn't great enough to be good for statistical modeling, and the price point isn't high enough to generate the revenue to invest in testing with great sophistication.

    Alas, the frustration of many entrepreneurs! You'll probably have to wait a few more weeks/months to see what happens.
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