Ted & Muffy – A Sad and Cautionary Catalog Tale

Most of you have an obsession with youth. You believe that the solution to your response problem is to appeal to a younger audience with your catalog. You have the 65-year-old woman in your back pocket, but you struggle to get her 35-year-old daughter to even look at you, let alone place an order. It is even worse if you appeal to a 45-year old, and you are attempting to acquire a 22-year old customer.

I’ve mentioned many times before that Datamann works with a number of UK-based catalogs mailing here in the US. They were all brought to us by a consultant with whom we work, who is based in London.

One of those companies was Duo Boots. Prior to 2015, they had a great catalog of nothing but women’s fashion boots, knee length and thigh length. These all-leather boots are handmade in England, and individually fitted to your foot and calf measurements.

Cool products, well made, great story and delightful catalog. For a fashion catalog, it did not stray from focusing on the products, the beauty of the products, or the craftsmanship of the boots. I’m usually not a big fan of editorial content in a catalog, but in their case, I thought it was well done. The book had a few design flaws (too much knock-out type), but in general, I loved their catalog.

Then in the fall of 2015, the Art Director sent me PDFs to review for the coming Fall season. They were repositioning the catalog to go after a younger audience. And, they were changing the catalog name to “Ted & Muffy – Fairytale Fitters”.

What? 

Below are a few of the spreads from that catalog in 2015.

I pleaded with the Art Director not to go in this direction. The consultant in London pleaded with them. Then we both begged them not to do it. We knew what the consequences were going to be. No one listened. In their mind, we were two old guys that did not understand how to appeal to the intended younger audience.

Aside from the totally bizarre creative direction, I was also concerned with the decrease in product density and a significant price increase. In addition, the products themselves were changing, with more “colored” boots.

The catalog mailed, and results, as you would expect, tanked. In 2016, they toned down the fairy tale aspect, and focused more on the boots, but still stuck with the new name of Ted & Muffy.

Sadly, things did not go well, and we learned earlier this year that the company had been placed under the administration of the bank, which luckily – and rather quickly – found new owners, that are keeping the business alive in the UK.

I’m sure there were many factors which led to the company’s downfall. The odd creative style is the most visible evidence of how the catalog drifted in a direction that alienated not only existing customers, but prospects as well. But pricing, product density, and overly trendy merchandise all contributed.

The point is this – it is really difficult to take an existing brand, especially one that is doing reasonably well (and they were doing well, at least here in the US), and think that you can acquire a totally different demographic by changing the creative, the mailing list and even the merchandise. If you are going to do all that, it’s probably better to just start a new title, and protect the core business.

I received the email below a few weeks ago. Duo Boots is back. Ted & Muffy, at least the name and the funky styles are gone. The new owners cannot be held accountable for the mistakes of the past, and I wish them well with the business.

Let the catalog brand positioning lesson of Ted & Muffy be a cautionary tale to any of you who are thinking that you can wave a magic wand over your catalog and suddenly get a younger consumer to be your new customer. It ain’t going to happen.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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The Coming Mobile Tsunami

Let’s get this out of the way right at the start – I don’t like the word tsunami. In my day, it was a “tidal wave”.  And that is the start of our problem – some marketers just can’t accept change.

If you have been a reader of this blog for a while, you know I have never given an endorsement to a 3rd party, except for the speakers I’ve had at our annual catalog seminar, including Amy Africa, Kevin Hillstrom and Frank Oliver. I also don’t believe in citing research published by 3rd parties, especially the DMA and the Postal Service, whose data, in my opinion, is always suspect.

I’ve been asked many times by other vendors to give their product or service a plug, but that is not the purpose of this blog. I want you to think about growing your business – I don’t want to always be giving you a sales pitch, not for Datamann, and especially not for some other company.

However, I’m making an exception today. Carole Ziter, from Trigger Email Marketing, sent me some original research that I want to share. I’m doing this for three reasons:

  • I’ve known Carole since 1991, when we began serving together on the Board of the VT/NH Direct Marketing Group. Last fall, I had the honor of presenting Carole with that Group’s Lifetime Achievement Award.
  • Carole and her husband Tom have helped me a number of times in my career with answers to direct marketing problems, which is what her research is about today.
  • Carole is a direct marketer at heart, owning her own catalog for many years, and now co-owning an internet service company. She is always thinking about driving response.

That bears repeating. For the almost 30 years I’ve known Carole, she is one of the most passionate people I know with regards to a love for direct marketing and getting someone to respond to an offer. With Carole, it’s not about a catalog or an email – it’s about getting a customer to respond.

Carole sees what’s coming and from her perspective, it’s a Mobile Tsunami. Unless you are one of those rare catalogs whose consumers are over 75, your customers are going to continue migrating to their phone to shop from you. If your target audience is 35, you already know this.

This spring, Carole’s company tracked 500 major catalog and ecommerce companies on one thing – did they have cross-device shopping carts, meaning if I put something into my cart while on my laptop, will it show up in the cart when I access the cart on my phone?

Below are the results of that research:

  • Of the companies tracked, 44% did not send a single email within their 3-week test period;
  • 60% had no abandoned cart recovery program – many of them well-established brands;
  • Of the companies with abandoned cart recovery programs, 39% sent a single autoresponder and 22% sent just 2 reminders, and 54% do not rebuild their carts across all devices.

Carole then took this a step further, and analyzed the cross-device shopping cart abilities of sixty of the companies that attended the Datamann catalog seminar in March. This was her process: Email subscriptions were completed via desktop when possible; a single item was placed in a shopping cart and abandoned via desktop; abandoned cart emails received were opened via phone; Return to Cart buttons were clicked via a phone to verify the presence of a cross-device feature.

Of the 60 companies Carole reviewed, only 29 (48%) had abandoned cart recovery programs. Of those 29, only 11 companies (18% of the total) had some form of a cross-device cart saver program.

One of the reasons I don’t write about these types of programs is that I feel that 90% are common-sense things that you should be aware of and should already be doing. Amy Africa was speaking about the need for abandoned cart email programs more than 10 years ago. Of course, Amy’s ideal was to start emailing consumers within 3 seconds of their leaving your site, but still, the concept has been around for a while, and has been proven to work. Plus, it’s not like the competition is getting any easier and that your response rates could not use a boost. So, it always comes as a bit of shock to see that companies are not doing some of the basics.

(Part of Carole’s research also tracked basic check-out procedures, and I was further shocked at the number of companies that still don’t have a Guest checkout. Why don’t you just tell customers right up front to go to Amazon?)

On the other hand, what is considered a “basic marketing technique” to one mailer is an extra hurdle to other mailers. There are literally hundreds of additional programs, services, products and methods that you are constantly being sold, and of which you are told that failure to implement each one will spell instant doom for your company.  Plus, there are ten different versions of each of these services from different vendors. You don’t have the time, staff or resources to do all of these things that you are told you should. You have scarce resources which you are struggling to manage.

But, as you get ready to go into this fall/holiday season, having a shopping cart that can be viewed across multiple devices seems to me to be one of those standard customer expectations similar to an 800# twenty years ago. You can’t compete with Amazon on many levels. But one thing which Amazon has perfected is convenience and speed. They don’t have a beautiful design, nor many digital bells and whistles. It is all about being efficient in getting your order. Keep that principle in mind as you think about your website this year. Get with it. (And if you want help, contact Carole by going to the Trigger Email Marketing website).

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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No, I Bought A Different Brand

A few weeks ago, I wrote very favorably about the B&H catalog, and their 330-page behemoth of photography equipment, which added editorial pages sprinkled throughout the catalog on how to pick the right photo equipment. At less than 5% of the page count of the catalog, this is by no means a “magalog”, which typically devote at least 50% of the space to non-selling editorial or “lifestyle content”.

It is easy to see what B&H is doing – they are trying to differentiate themselves as the de facto place to go for photo and video information and by extension, for purchasing that equipment. But, here is the problem that I see: I purchased a Nikon camera from them a year ago. I have subsequently purchased a few filters for my existing Nikon lens. It’s pretty clear, I’m sticking with Nikon.

But, they keep sending me emails for all kinds of other products from other brands, including the one received this week for Canon cameras. To me, this says one of three things:

  • Like many other catalog companies, they probably have antiquated legacy systems which prevent them from doing any finer segmentation of their emails by product;
  • Or, upper management may not see that as an issue because they probably rationalize that “Hey, we don’t want to miss a sale because someday you might decide to buy a Canon”.
  • Or, they are incredibly unsophisticated, and don’t want to bother with any segmentation, because it is still easier and possibly even profitable, to keep blasting the same email to all customers, for a catalog with thousands of SKUs.

Further, they have failed to send me any “specialty” catalog of just Nikon equipment. My camera has lots of bells and whistles, many of which I’m still learning. They could be sending me a small, targeted 24-page catalog of just the accessories that are right for my camera. I’d look at that!

I don’t need the 330-page encyclopedia, which is quite frankly, pretty intimidating. I need a targeted (dare I even say “curated”) collection of just the products for my camera. I didn’t buy Canon, or Sony, or Hasselblad – so quit sending me the stuff for which I have no use.

Some of you might be thinking that maybe there is not enough margin in doing a specialty book by camera brand alone. I don’t think that is the case, but let’s assume it is – they could at least do a mini-catalog of lenses, or camera cases. It would have to be more productive than sending the 330-page tome once a year.

Why is this a big deal? B&H has an edge at the moment, based on its photographic knowledge, great customer service, reputation and depth of product assortment. But none of that matters, does it?  The reason – there’s someone out there – maybe Amazon, maybe some company that is yet to be heard from – that is going to realize how big B&H is from a sales perspective, and will take them out by using data, targeted advertising with advanced CRM, and a bunch of other sophisticated tools.

And it isn’t just B&H. It is every other catalog company (B2B and B2C alike) that is failing basic catalog marketing by becoming more targeted, more focused. I’m a consumer that is tired of being ignored – I want to be recognized for what I need. Sending me 330 pages of products, only 20 pages of which are applicable to my needs, is no different than going into a retail store and being ignored by the sales staff. You may have a million SKUs, but someone else is going to figure out a way to be more relevant to me. Good intentions are no longer enough.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Catalog Creative In A New World

Let me do something different today – I’m going to offer comments on a catalog that I think is doing an adequate job (that’s as complimentary as I get) from a “creative” perspective, but is certainly not a traditional catalog. I’m also going to check how they are doing against my list of 21 catalog creative rules, and in the process, illustrate why many of those rules don’t apply here.

Let me be clear, it is a catalog from which I would never purchase. It is also not necessarily catalog creative that I like, or that resonates with me – but contains “creative and design elements” that I expect resonates with the catalog’s intended audience.

The catalog is NatureBox, which is a relative new comer mailing since at least 2014, and is from what could best be described as an “online company”. NatureBox is a membership program ($50/year) that you must join, and they ship you snack food, which you have to pay for on top of the yearly membership fee. (Note: they have all kinds of deals/rebates on their website, so please don’t write to me to tell me I have their pricing wrong).  Right off the bat you are spending $50 for the privilege of buying snack food that you could buy at just about any supermarket, and most gas stations.

Not off to a good start

I received these two catalogs earlier this year, one addressed to me, one to one of my seed names.

My first reaction to this company as catalog marketing mavens was not good, since I considered the cover test they were conducting to be a classic example of a test that makes no difference.  What does it prove? How do you act on this in the future if the one on the left does better than the one on the right? I am certain that the creative director at NatureBox could explain in painful detail the difference between these two covers, and how each resonates to a different type of person. But, come on…to the average consumer, there’s no difference here, so stop doing stupid tests like this.

Don’t Tell Me About Your Grass Seed, Tell Me About My Lawn

Oh God, no! Right on page 2 – the most valuable page in the catalog – they have a President’s letter, Actually, it’s worse than that – it’s a letter from Travis, the Director of Sourcing and Innovation. Travis tells us how he likes to “discover and develop new and unique flavors”. The focus of the copy is all about NatureBox and Travis, and nothing about you, the consumer. Plus, there is no mention anywhere in the letter that this is a membership offer – oh, why be so sneaky? If you are going to waste space with a letter, don’t you think that’s the place to tell the consumer the part of about the $50, but then also explain that you get a $50 credit applied towards purchases? That’s kind of basic customer service courtesy. (The only reference to the membership is on page 27 – one lonely line of copy that says “join today – NatureBox is only $5 per month, which is credited towards your purchases”).

Between the cover and page 2, these guys are failing two of my basic rules of catalog creative, which are no dumb cover tests, and no president’s letters.

However, page 3 gets us back track, because they show their eight top snacks. That’s good merchandising – show the best stuff up front, and tell me it is your best stuff.

But, the copy, which is tiny (can’t be more than 3 point font), never tells how much you get. Do I get a bag of each snack, a box, 2 ounces, 10 ounces – what? Maybe you get the amount of product shown in the photo? That isn’t clear if that is what I get. Further on in the catalog, on the “nuts” page, each sampling of nuts is listed as 8 oz., so their labeling/merchandising is inconsistent.

However, go to their website, and it is a different story. Each product description lists in detail the serving portion.

Below is their center spread – which does no selling. Oddly, it shows 11 icons, which you can use to “shop our catalog using these filters”. But again, these “filter icons” appear sporadically through the catalog, and not on every page or product, so how do you use them to shop the catalog?

Finally – this is their exit spread (below), with again, no selling.

In a 36-page catalog, 12 of the pages, one third of the total catalog, have no selling, and six of the remaining pages are selling a single product, the highest priced of which is $3.79.

Why This Is Not So Bad

As with many things in life, one of the things which you learn as a catalog consultant is that not all rules apply to all catalogs. If this catalog were selling garden tools, this “minimalist/lifestyle” approach would not work. People who buy those types of products want specifics, and are not impressed by lifestyle imagery.

People who are willing to spend $50 just for the privilege of buying snacks are probably equally concerned with those details, but NatureBox recognizes that they cannot “seal the deal” to get you to be a member from the catalog alone. You have to go to the website to do that.

Consequently, this catalog is a 32-page web driver. Its primary purpose is to sell you on the concept of buying healthy snack food, in a convenient way, at seemingly very affordable prices, as almost all the “snacks” are under $4.00. Moreover, these customers are not taking the time to calculate the cost per pound to determine the equivalent cost at Wal-Mart.

As a marketer, the temptation for me would be to gut this catalog of those 12 non-selling pages, get the page count down to 24, and add in a ton of extra products, with longer, more detailed descriptions. That would probably be a huge mistake. The margins on the products in this catalog are probably obscene, which is what allows them to have 1/3 of the catalog not selling anything beyond a warm feeling, and force people to go to the website.

Are there creative changes I would make to this existing book? Yes, I’d stop the cover tests and get rid of Travis’s letter. But other than that, we have to recognize that this is a new world. This is an example of a catalog where the website is MUCH stronger than the catalog, which alone negates many of my “21 catalog creative rules”.

NatureBox is also an example of how an online company maxed out its ability to acquire customers online with PPC, SEO, etc. Search on “healthy snacks by mail” and you’ll discover a host of companies doing the same thing, including Graze, Healthy Surprise, and Urthbox. NatureBox’s catalog is just one more tool to reach different audiences, though sadly was mistargeted at me.

The lesson here – NatureBox’s catalog creative – with all of its drawbacks in a traditional catalog world – probably resonates with their target customer, and reinforces the concept that your website MUST be stronger than your catalog.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Whose Call Is This – the CEO, Marketing or Merchandise?

Here was the question – “I’m a merchant, battling what our marketers do. In my opinion, catalog marketing optimization has its downsides, namely, blindly going where the response rates lie.  As more money is spent on the catalog, the optimization tactics our marketing department use quickly become our brand face.  Our catalog promotes an outdoor lifestyle, but because of always chasing response, our top sales drivers are more likely to be a turtleneck than a tent.  What can I as the merchant do, because I see this direction as ultimately destroying what originally made our company different?”

This question was from a reader of this blog, which I used in the Q&A portion of our catalog seminar in March. I asked Frank Oliver, our “merchant” at the seminar, to address the question. I had not shared the question with Frank previously.

As a merchant, it would have been easy for him to agree with this question, and put all the blame on marketing, as the reader who posed the question had done. But after a slight pause to consider his response, Frank replied “So, this merchant is complaining that one set of products is selling better than another, and is blaming marketing? This is not a marketing issue. Marketing does not pick what products go in the book. The CEO sets the direction for what products will exemplify the company’s “mission/brand”, and the merchants carry that direction out. Don’t blame marketing for driving response.”

“The optimization tactics our marketing department use quickly become our brand face. I’m a marketer, so I can imagine what tactics the merchant is referring to, namely using the co-ops for prospecting. If marketing instructs the co-ops to provide the most responsive names, and the co-op’s database skews towards an older consumer (let’s say 55+), then this merchant’s logic is that marketing has driven the catalog off its intended course by loading up on customers that don’t belong to the merchant’s vision of the intended customer.

I look at this a little differently. If you didn’t want to go to Chicago, why did you get on the bus bound for Chicago? If you did not want turtlenecks to become the “brand face”, why did you put them in the catalog in the first place? The reader stated that the catalog promotes “an outdoor lifestyle”. If the catalog is doing a decent job of promoting that “lifestyle”, then any product the consumer purchases gives them a connection to that lifestyle. Don’t blame marketing if the products being purchased begin to skew away from an intended or original mission for the company. The products in the catalog or on the website are there because the merchants put them there – and I’ve never met a merchant who did not think that every new product would sell well.

Besides, name a successful catalog or company where the product selection has not evolved over time. Isn’t the purpose of a company to maximize profits for the owners/shareholders? Wouldn’t that dictate that you sell the products that the customer wants, rather the ones which you think they want, or you think they should have? Yes, I know, you are going to point to Apple and quote Steve Jobs who probably said something cool about not selling turtlenecks when you could sell tents. But using this example, if your margins are sound on the turtlenecks, and the customers you acquire on turtlenecks convert to buy other products (like tents) from you, what’s the problem?

Yes, I agree that some marketing tactics can skew the composition of the audience. In the late 1980s when I took over as the marketing guy at Brookstone, I found that our prospecting strategy consisted of always offering a cheap premium (free jackknife or flashlight) with each first-time order. To drive response, the prospecting lists acquired from our rental/exchange partners (this was before the co-ops) were their “sale” buyers. All this strategy did was attract the pond-scum from everyone else’s files that wanted a free jackknife. So, this is not a new concept.

Ten years ago, the concept that the co-ops were skewing the composition of the customer base may not have been as well understood, or as evident, as my Brookstone model. But everyone in cataloging today should understand that the co-ops are skewing the composition of your buyers, certainly toward an older consumer. Can they also be skewed toward a propensity to purchase one type of product over another – certainly.  If a modeler at one of the co-ops knows that by providing you one group of names (turtleneck buyers) over another group (tent byers) that your response rate will be 10% greater, they are going to give you the higher performing names. The result of that might be more turtlenecks sold than tents.

The question becomes not how we got here or who is to blame. The question is whether you can make a course correction now. Ultimately, the companies that carve out a unique position in the market via merchandise will be the ones that survive. That may mean merchants need to prune from the product assortment those products that are commodity in nature and not in keeping with a product strategy that promotes that “uniqueness”. Of course, the CEO, and Board of Directors, must acknowledge that a move like this might mean forgoing short-term gain on the turtlenecks, to ensure long time survival by focusing on tents.

To answer the merchant’s original question as to what he can do, he can make everyone – especially the CEO – aware of the tradeoffs involved with maximizing response versus maintaining a unique identity via merchandise. And if the CEO still wants to take the bus to Chicago, at least you have made everyone aware of the consequences.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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Don’t Worry About The 40X Names, Focus On The 1X Names

Think about what you ask the catalog co-op databases to do. You ask them to find you the best names for your mailings.  Those names are usually buyers at your closest competitor’s catalogs. If  I’m the circulation manager at LL Bean, I want the co-ops to give me names of good buyers from Lands’ End, Orvis, Eddie Bauer and Woolrich.

In theory, this is exactly what happens. If I have made purchases at all those other companies, I would look like a great prospect to LL Bean. My name would float to the top of every model LL Bean receives from their co-ops.  But, what if I’m just not willing to become an LL Bean customer?

These consumers that are actively purchasing from other catalogs have nothing against you. They are simply comfortable with the companies from which they purchase now. In the apparel world, they know that what they purchase from these other companies will fit, and fit the way they like. They don’t need to add another apparel catalog to their fashion mix with the risk of dissatisfaction over an order.

The same phenomenon happens in hard goods and gifts. If I’m strong buyer of Virginia peanuts and Pacific salmon by mail, it doesn’t mean that I’m guaranteed to want Wisconsin cheese or Vermont maple syrup, although my name probably floats to the top of models for those other food catalogs as well.

You have prospects like this too. You have a core group of prospects that you mail over and over because they are either good customers with your competitors or with companies close to your product mix.  You either rent these names directly from those companies, or receive them in your co-op models.  But these consumers are never going to buy from you because either they don’t need you, or they choose to stay loyal to the other brand. You just keep mailing them over and over.

But, that may not be a bad thing.

Datamann builds and maintains prospect contact histories for our clients, which is a database that tracks the number of times you mailed a prospect name (individual or household) before you finally received an order from that consumer, as well as tracking those that have never ordered.

The report shows the optimum number of times to mail a prospect to get the maximum response rate, but more importantly, it illustrates the point at which it is no longer profitable to mail that prospect name. You can suppress these “over-promoted” names from future mailings, as well as send them to the co-ops to have them suppressed from the files you order.

Every client for whom we produce these reports uses them differently. Further, every report we produce has vastly different patterns of response. In the sample report above, there were 67,450 prospects mailed for the 12th time in five years (not consecutively). 3,476 of those prospects finally responded to their 12thth mailing, generating a 5.15% response rate for that group of names – not bad. We always see that the response builds over time, but where it reaches the maximum response differs widely. For some mailers it may occur on the 5th mailing. For others the highest response rate may not be achieved until after the 20th mailing.

It is always shocking for some mailers to see that they have prospects which they have mailed 20, 30, and sometimes 40 times, without ever placing an order. Some mailers thought they were always getting “totally fresh names” with each mailing. But think about this – the co-ops are doing what you asked them to do – which is send you the names most likely to respond, which would be those buying from your competitors. The co-ops are not coordinating with each other to say “Oh, I sent that name last time, so you shouldn’t send it this time.” However, this is not necessarily a bad thing.

If you are a longtime reader of this blog, you know I’m not a big fan of the co-ops. It would be great if they could identify those buyers that are extremely loyal to your competitor’s brand, who are unlikely to ever buy from you, and not send them to you.  But in this case, I’m not sure they ever could, or that you want them to. You need to determine how to structure an offer to these names that you have mailed 20 times, or 40 times, to get them to buy from you. What’s it going to take to get them to buy from you?

Look – this is not rocket science.  The co-ops are NOT analyzing 320 million US residents, sifting through tiny bits of data that reveal a fresh new consumer that no one has ever mailed before, who is destined to become your greatest customer ever. No, if the co-ops are doing their job correctly – meaning they understand who your customer is – then they should be sending you these top prospects that are actively buying from your competitors over and over. Those are the names with the highest propensity to convert to being your next new customer. The problem is that this scenario repeats at every other catalog company too. The catalog that raises their game and determines how to appeal to these active prospects/consumers will be the winner.

Here is the bigger issue I see. Look at the top row – the 1X names. Every time we create this report for clients, we see a similar pattern. The 1X names are two to three times greater than the 2X names. Overall, the 1X names are 38% of the total quantity of names this mailer has ever mailed. Doesn’t that seem odd? The co-ops are supposed to be giving you the best names. They “model” what they send you. You are supposed to be getting the best of the best. That would mean you should be getting more of the same names more often.

But, almost 40% of the time, the co-ops sent you a name that they subsequently decided was not worth sending you again. Those are the names you need to focus on. Were those “filler” names that the co-ops gave you to get your quantity up? When you are planning your Fall and Holiday circulation this year, ask the co-ops their strategy on giving you names only once vs. multiple times.

Here is another aspect of this report. Let’s assume this mailer is willing to generate a loss of $45 in profit to acquire a new customer. On an incremental basis – looking at each mailing as an event unto itself – this mailer does not reach this threshold until the 34th mailing.  But, what if you looked at this cumulatively? Go back to the 12th row. You did not just mail 67,450 names to get those 3,476 orders.  You mailed 809,395 catalogs (12 x 67,450).  If you include the cost of all those additional catalogs mailed to get those first orders, you actually lost $97 in profit (far right column).  You would attain your allowable profit per new customer (-$45), measured cumulatively, on the 7th mailing.

Should you stop mailing after that 7th mailing? It depends on how you view your “sunk cost” of those cumulative mailings. Most of our clients want to continue mailing prospects as long as it remains incrementally profitable to do so. However, some want to include those “cumulative expenses” in their lifetime value calculations to determine if a customer that required 40 mailings from you to make their first purchase, was really worth it in the long run.

Datamann’s Prospect Contact History is easy to implement, and provides you immediate return because in most cases, there is no testing involved. Your accumulated mailings over the past 5 or 6 years are the actual testing grounds where you mailed all those prospect names. As long as we have your old mail files, we can build a similar database for you. Contact me for details.

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by Bill LaPierre

VP – Business Intelligence and Analytics

Datamann – 800-451-4263 x235

blapierre@datamann.com

 

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