Proactive Steps for Your Marketing Plans

A serious and unprecedented pandemic calls for calm, reason, and realism. As leaders, it’s essential to remember that engaging in contingency planning and caring for our clients and employees should be our top priority. As global events continue to unfold, we felt it essential to gather our thought leaders together to guide and advise appropriate next steps in strategy and tactics for clients as they, in turn, engage their customers. Before the pandemic reached a declaration of emergency, many clients were reporting records results amid record-low unemployment. A general sense of economic optimism, however fleeting, was felt by the American consumer. Throughout many challenges over the years, there is a remarkable resiliency to the American consumer.

One testament to that resiliency is that the American consumer generally doesn’t stop shopping; they just shop differently. Roughly translated, that usually means less frequently and more strategically. In countless boardrooms around the world, company leadership is uniformly asking, “How can we hold or reduce expenses while riding out the next several weeks?” Such conversations are deeply critical in determining where to focus precious resources, to the most effective channels, while garnering maximum effect.

As we engage with clients in thoughtful discussions and proactive decision-making, a few common threads are emerging. While the current environment requires a high degree of flexibility and adaptability, especially considering your industry vertical, there are some key observations and lessons learned we’d like to share with you:

1. Current strategies, and should they change?

There is no “one size fits all” approach. Some industry verticals, such as hobbyists and food, are doing exceptionally well. Other industry verticals, particularly retail stores, are struggling with the best way to optimize their marketing plans, given that many are temporarily shuttering their brick and mortar locations. Depending on the sandbox in which you operate, we see the following changes with upcoming in-home catalog windows:

Strong industry verticals: right now, we are making slight adjustments to in-home windows but are not making drastic cuts in circulation strategy. Some strong industry verticals are doubling down and increasing the frequency and depth of mailings, closing aligning them to their other marketing channels such as email. Adopting such tactics could work for verticals that do well in this environment: horticulture, home hobbyist, food, and pet.

Struggling industry verticals: Home, apparel, mid-market, and luxury goods are running flat (as of today), with some struggling to comp YOY demand. There are a few strategies to consider pending flexibility with printer and paper vendors. In some cases, we are pushing back in-home windows by a matter of weeks, and in some isolated cases, even months. Depending on the client’s situation, we may do a combination of pushing back in-home windows, reducing circulation to less responsive customers/prospects, and adding a later print contact to their best buyers. As mentioned in our previous article, it’s essential to stay present with your best buyers, so an added remail may make sense.

Before you first decide to reduce print media because of the expense, please understand how each channel performs on a contribution level and not the basis of the initial expense outlay. Too often, rushed decisions fail to incorporate an understanding of channel performance, organic demand levels, and Lifetime Value. For example, while some digital channels may be less expensive on a click basis, their contribution level may be much less on an order basis compared to a seemingly more costly print channel.

Once you have decided how much you plan to spend on print, begin to incorporate advanced segmentation into your marketing plans. Always utilize advanced segmentation on customer behavior in addition to traditional Recency, Frequency, and Monetary (RFM). It’s increasingly imperative to incorporate digital indicators (point #4 below), gender, merchandise propensity, and other variables that enhance the ability to tactically target customers who are most likely to buy during a downturn.

Brands with retail stores: as the list of ever-growing temporary retail store closures mount, re-consider the depth and frequency of postal mailings driving customers online for ecommerce fulfillment opportunities. In this scenario, advanced segmentation strategies are critical to making the best decision on who and when customers receive a catalog or direct mail piece in addition to traditional digital marketing touches. Segmentation around trade area vs. non-trade area, active email/no email activity, and digital engagement indicators are critical in making the right decision around print engagement opportunities. Changing a customer’s preferred channel from store to online may mean to incentive with an offer.

Moreover, be honest and transparent with customers (see point #6 below) if and when you begin to close stores temporarily. Customers will understand and ultimately be more loyal when you do the right thing for the health and safety of your employees and are honest and frank about your supply and fulfillment disruptions.

2. Don’t cancel your acquisition campaigns.

In last week’s article, one key “lesson learned” is the importance of maintaining your customer acquisition programs throughout the downturn. While it’s often tempting to cut acquisition in a quick bid to bolster the bottom line, the unintended consequences of such a decision can prove catastrophic coming out of the crisis and into the following year (note: there’s always going to be an upswing). Over the years, we’ve seen well-intentioned brands sever this vital artery, which we classify as the lifeblood of any business. The cascading effect of natural customer attrition combined with no new incoming customers is devastating, leading to many brands’ ultimate demise. Hyper-optimized social and shopping campaigns coupled with postal retargeting and catalog acquisition working in tandem can capitalize on niche audiences during this period.

3. Optimize strategies based on the 80/20 rule.

Also known as The Pareto Principle. Investopedia describes The Pareto Principle as “an aphorism which asserts that 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event.” For marketing, this generally implies:

  • 80% of sales come from 20% of your customers. Focus squarely on your best customers across your print, email, and digital marketing channels, forgoing attempts to convert marginal customers and tire kickers. Depending on your brand’s philosophy, you might consider temporary incentives to welcome your best customers to come back.
  • 80% of your merchandise demand derives from 20% of your products. Assuming your top-performing products are in inventory, display them in critical hotspots on your website, displayed above the fold in sub-categories, displayed in internal site search, and featured prominently in your broadcast and triggered email campaigns. Be aggressive in biddable media, such as PLAs (Product Listing Ads), bidding for placement well above the fold, but be mindful of potential inflationary pricing that might occur. Even outside of a crisis, you would be surprised how frequently brands lose sight of products that drive the majority of their demand.

4. Leverage digital browse intent for lucrative postal retargeting opportunities.

During a sharp downturn, it’s not uncommon to find that customers browsing on your website often show a higher degree of purchase intent. A key strategy to leverage now is to focus persistently on the lower portion of the sales funnel to drive healthy conversion numbers. Now, more than ever, incorporating digital data indicators in your plans is very critical to determine what your optimal marketing strategy should be as you move forward. As a refresher, browse intent provides critical indicators on who is actively browsing on your site (active customer, inactive customer, and prospects). Additional insights include visibility into what products they are they engaging in with as well as how long they are spending on your site. For customer records, these insights can be appended to your database. For both customer and prospect records, you can retarget those browsers immediately with a highly-effective, highly personalized, postal retargeting program. The results speak for themselves:

And incrementality brings home the bacon for postal retargeting:

5. Relentlessly optimize your campaigns.

With email and digital marketing now predominant in your overall marketing strategies, now is the time to take your optimization tactics up a notch. As noted above, data is your friend! For years, you’ve been collecting performance data and understanding the marketing funnel. Start or accelerate A/B tests to continually increase the ROI of your campaigns. In particular, consider letting AI (Artificial Intelligence) loose on your marketing data, and seeing whether there are hidden trends and correlations you can leverage. For example, the advancements of AI usage within email campaigns show that, over time, it’s possible to double or even triple open rates and click rates. Technology has come a long way in the last few years!

6. Be honest and transparent with your customers.

Since many catalogs and direct mail pieces were printed or in the mail stream as the crisis unfolded, the timing of your print campaigns arrives into your customer’s mailbox may seem like a disconnect to your customer base.

Michael Millenacker, the CEO of the iconic outdoor brand, Royal Robbins addressed this first hand in a great email sent to customers this week. In summary, he wrote, “This week, the Royal Robbins catalog will be landing in your mailboxes — featuring photography and stories from our recent trip to Japan. This was created, printed and mailed before this virus changed our world. So, please keep in mind that given the current situation, it is not meant to encourage you to travel to Japan right now. We do hope you enjoy the catalog for all its wonderful product our team has so passionately created and look to the future when dreams of travel will be in our lives again. In the meantime, we encourage you to find adventure and solace in the natural world around you.

Royal Robbins has been in business since 1968, and weathered many storms by keeping its focus on the well-being of its employees, customers and the larger community. We will continue this focus in support of all of you during this challenging moment in our history.”

As the crisis upended global supply chains and the ability of internal staff to resolve product availability challenges, for many product deliveries may inevitably be delayed. Now is the time to be transparent to your customers and get ahead with proactive, relevant messaging. Customers will understand your fulfillment and backorder challenges when they hear from you, from the heart. Yvon Chouinard perhaps said it best when he regularly commented that “every time we’ve done the right thing, it’s ended up making us more money.”

7. Control your brand.

For brands who operate within both a wholesale and direct to consumer environment, you can’t necessarily control what the wholesaler/retailer is doing (or closing), but you can ramp up or down your marketing campaigns to leverage or mitigate opportunities. One debate within the business community achieved clarity and resolution this past week: the importance of developing a direct-to-consumer business model is essential. In light of store closings, now is the time to drive email and retargeting efforts and promotions to make up revenue demand. Additionally, develop messaging concepts that speak to the theme of “purchases with a purpose.”

8. Crank up the pace.

Where should you begin to make fast business adjustments in your business? Whether it is faster turns, shortened delivery times, quicker approaches to customers, and maintaining cash flow and margins, your goal is to become less of a 747 airliner, and more of a nimble Lear Jet! Here are some ideas to get you started:

  • Raise inventory turns at least 10% to 15% (i.e., if at three turns now, raise to 3.3)
  • Streamline assortments. As the average consumer’s buying power declines, tastes turn to value, quality, and needs.
  • Tighten delivery schedules closer to the selling season.
  • Be nimble, quick, first in line to take advantage of deals. Have ample open-to-buy funds and seize opportunities to buy merchandise at reduced prices. (Vendors are trying to turn their inventories into cash, too!)
  • Take quicker markdowns.
  • Make sure that all orders have cancellation dates, and that the vendors comply with them.
  • Examine freight costs. Are you paying for unnecessary premium deliveries? Is it possible to reduce “rush” shipments through better planning?
  • Go for gross margin dollars, not percentages.
  • Cash Flow is essential, especially as you plan for the important Q4 period. There will be pent up demand and retaining cash flow is vital to future business plans
  • In crunch time, if you must choose a goal of profit or cash, always forego profits, not cash. (Remember, you eat on cash flow, and pay taxes on profits!)
  • Manage your inventory with an eye to cash flow. When placing large orders, request small shipments, and ask for dating.

Until the pandemic subsides, we all have to hunker down and ride out the storm. But the companies that will come out of it fastest will be the financially strong and best-prepared one’s going into it.

If you need help to strategize and understand marketing data for better marketing opportunities, please feel free to reach out to the crisis planning team at We’d love to help with you.

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