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Measuring the impact of mailing a household multiple times during the same season

Posted on December 19, 2011

When you are up against the need to maximize both sales and profitability in Q4, you should be sure to have some tests and metrics in place to measure the impact of mailing the same name multiple times.

  • Know your sales curve for each drop so that you don’t over allocate “unknowns to the last drop before Christmas.  Just knowing the sales curve for the various drops from looking at your key codes will let you allocate those post-Thanksgiving “unknown” key codes properly.
  • Test the sales revenue of mailing a prospect or marginal house name a single time versus two or three times.  After you have the sales revenue top line number, be sure to get to the profitability by subtracting the catalog cost of a second or third mailing to the same prospect.  You want to avoid having more revenue versus less profits from multiple mailings to the same household.
  • Having too many drops in Q4 can be more expensive and harder to read results.  Having multiple drops has some hard costs; each time you are in a co-mail pool you have to pay the printer a hefty administrative and processing cost of several hundred dollars.  And, if you break up your mailings into multiple drops, you may lose co-mail postage savings (even though the printer will tell you this will never happen, you may get bumped to the smaller mail pools) and you face the risk of a mail pool being delayed so your in home dates may fall on top of each other.
  • Mailers may seek to find unique prospecting names by pulling balance models.  This strategy can work but it can backfire.  Balance names are mailed later in the season and often miss the sweet spot of the best in home dates for the holiday season.  Mailers should build the biggest, best coop database models in the initial merge (so taking just “new” names or just “previous” names is usually a mistake.
  • You should make sure you take the various coop models, put them in the merge and correctly segment them as overlap names that are multis between two or more coops and coop singles.  Coop overlap multis can often be mailed twice in a single season and these names are the best names.  Overlap names almost always outperform coop singles.
  • Make sure you don’t segment one coop’s singles only and try to compare those results against another coop that combines their singles with the coop multis combined together.  You aren’t comparing apples to apples.  You can check this by looking at the gross-to-net percentage in the merge or by comparing the number of singles as a percentage of the total number of names in the various coop segments.
  • Make sure you can back out of your matchback results all the sales that result from late season e-mails.  That credit should go to the e-mails and often matchback results credit those e-mail sales back to the last catalog mailings in a season.

    • The key way to preserve your profitability is to know how many prospects are being mailed multiple times and the catalog cost of those second and third mailings compared to the incremental revenue being generated.  Profits get pretty skinny when you are mailing two or three or four catalogs to get incremental prospecting revenue.

    The coops have good optimization models that you can use to only mail the “best-of-the-best” prospecting names and to score older multibuyers and these optimization models should be part of cataloger’s circulation plans.  If you are taking a large portion of your circulation from a single coop, use another coop’s optimization model to score your prospecting file.

    What to do in the face of increased postal costs

    Posted on December 16, 2011

    So postage is going to go up for catalogers again this Spring. This is not the first time and in all likelihood it won’t be the last.

    Every time the USPS has increased rates in the past, catalogers have mailed fewer books. Marginal circulation has been eliminated. It is a downward spiral. It is a pretty simply formula, i.e., increase the cost and reduce expense by mailing less and revenue remains about the same (or decreases).

    So if you are planning on mailing less this year plan on making less revenue.  If you don’t want to make the same or less revenue let me suggest a radical strategy. This is the time to increase your circulation! Why? You need more customers to cover increase costs. How do you get more customers? You mail more catalogs to prospects.  Another positive is that most WILL decrease circulation, what will that create? Less catalogs in the mailbox = less compteition.

    To iPad or Not to iPad

    Posted on April 12, 2011

    Gary Sierzchulsk, VP, Arandell Marketing Solutions

    Look at some of these facts:

    • Over 20 million sold so far (selling at a faster rate than the iPhone)
    • Second generation of the iPad sold out in less than two weeks; Third generation of the iPad already scheduled for release later this year
    • Publishers have embraced the device and virtually all have an iPad version of their publication or have completely converted to the electronic tablet
    • 50% of Fortune 100 companies are testing the iPad for business use
    • Here is one to remember: Conversion rates are five times higher with an iPad versus other mobile devices
    • Average age of user is 44; average income is $65k (both numbers are dropping)
    • iPads are now being sold at retailers like Walmart and Target, becoming more mainstream

    So with all of these trends, why not test the water? Here are some of the reasons I have heard from our customers:

    • Not enough of them in the market…yet
    • My customers do not “fit” the user profile
    • It’s just an electronic catalog
    • How will my customers find my app?
    • We don’t have the internal resources to support it
    • The ROI is not there
    • It’s a fad that will soon fade away when something else comes along.

    All of these are valid concerns. But if you’re looking to meet the needs and wants of your customers TODAY, provide them with another channel to match their lifestyle; you owe it to them and your company to investigate this channel. As you know, the easier you make it for your customers to connect with you the better for your brand (and your bottom line). Even if you generate no sales from the device, the increased exposure of your brand may more than justify the cost.

    The iPad is an extension of your catalog, not necessarily the exact same version of your printed catalog…but could be. Like all other marketing channels, its performance can be measured. And here is another cool opportunity…we now have the technology to drive personalized content to the iPad.

    Granted, it is a new channel and many questions remain but at the current growth rate for this product and the evolution of your customer’s demands, you need to have a presence in this channel now as opposed to later.

    Remember just two years ago the discussions you had internally about social media? Look at how that channel has impacted your business. As someone once said – the future is now.

    Let’s talk. Contact me, Gary Sierzchulski, at 800-558-8724.

    How Database Marketing is your Catalog Program Solution

    Posted on July 08, 2009

    Gary Sierzchulski, Vice President, Arandell Marketing SolutionsIn 2009 there is an unbelievably large amount of ways a CMO can spend his/her budget. Aside from the traditional direct mail pieces, tradeshows, T.V. and radio ads… we now have e-commerce websites, blogs, forums, Facebook, Twitter, etc. At the end of the day, just like we had to do when I started in this business,  CMOs are required to investigate their ROI in each effort. Listen to the podcast below or continue reading to learn the latest trends in database marketing and how you can apply new techniques to your marketing program.

     

     

    Click on the link below to listen to the podcast.

    [download id="3"]

     

    Q: In the past, we have always stressed to our customers that the database is the most critical marketing component for direct mailers. Is this still the case?

     

     

     

    A: Absolutely. In the last six to 12 months, our customers have been looking to their database for solutions about how to reach their customers more effectively. What we are seeing is that the current make-up of their databases is not working for them as they try to move forward. Our role is to work with the customers to try to develop their database to a point that makes it more relevant and more efficient to perform cross-channel marketing.

    (more…)

    The Power of Matchbacks: How they will save your direct mail program

    Posted on June 19, 2009

    Gary Sierzchulski, Vice President, Arandell Marketing SolutionsIn case you haven’t heard this lately, ROI is the not-so-new mantra. Click here to see the latest epiphany from eMarketer exclaiming ROI a must-have. Costs seem to be driving many decisions lately; this is no surprise because many of you are in survival mode right now.  With all the channels / customer touchpoints now in play, it is more important than ever to understand the impact these have on your business and the revenue they generate (and yes…as well as the costs associated to them).  We talked about matchbacks as being a key, but as you all know it’s not an exact science. Tim Perry from CWDKids recently stated his frustration about the lack of conclusive data in an article in MultiChannel Merchant. In my opinion, however, matchbacks do give you a very good handle on what is driving your business and as long as the business rules are constant, the information is extremely valuable and useful in analyzing current campaigns and in preparing future campaigns.The biggest constant resource in all of this is your database. It is also your biggest asset. Your database should accommodate all your marketing channels and any new ones that are being created this week.  By accommodate I mean that each channel can be clearly viewed and measured in terms of your key needs. The database should also support outgoing information as well as incoming information.

    Outgoing information includes; dates, costs and event codes for all campaigns; direct mail, retail, email, Twitter, text or even the ancient telephone campaign. It is critical that each time you touch a customer that information is maintained. With the cost of storage and data decreasing as I write this post, there is no reason not to. Detailed reporting can be derived from this information and you can determine the true value of your customers.

    Incoming information includes; orders, returns, “take me off your list,” “do not email me,” “do not call me,” change of addresses, survey information, etc. Again the more you have and maintain, the better.

    All this information, literally at your fingertips, gives you the knowledge to understand the what, why, who, when, and how much and makes marketing decisions easier. The key is to have a platform that allows you to do all of this. We will elaborate in later blogs.

    How to Avoid Flawed Results

    Posted on June 16, 2009

    Gary Sierzchulski, Vice President, Arandell Marketing SolutionsNow more than ever understanding what each of your marketing channels is driving your orders is critical to your success.

    Marketers have attempted various methods to achieve this understanding.  What we have found is that in many cases the results are flawed and as a result, decisions as to how to move forward are based on inaccurate information.  Doing this process internally sometimes leads to personal preferences and emphases on a particular channel over another. 

    Even if you decide to keep your matchback process internal, it pays to have an outside company occasionally provide the matchbacks for you. Here are three reasons why:

    • The external company can validate your results. For a few hundred dollars you could receive an external reassurance that you are on the right track, and you can continue to charge ahead. Worst case scenario? You weren’t on the right track and now you have a great resource to help you fix and improve.
    • Ensure your methodology is consistent. Every company has created a system that works for them depending on their culture and the different personalities in the team. An outsider looking in has the ability to find the flaws and the areas that your team might have overlooked or neglected.
    • Review your best practice business rules. There are many different ways to peel an apple. Sometimes your company’s best practice business rules might not be, in fact, the best. A fresh perspective is great to challenge and refine your current approach.

    Going through the process, discussing and agreeing to the business rules, understanding where the data is coming from, etc. are all critical to the accuracy of the analysis.  Keep in mind – you should already know the total sales for the period being analyzed.  The matchback fine-tunes those numbers into the proper channel receiving credit for the sale.

    Prospecting with the USPS Summer Sale

    Posted on June 03, 2009

    Gary Sierzchulski, Vice President, Arandell Marketing SolutionsWell, as you all know, the USPS is strongly considering offering a discount this summer if you increase your circulation over the same period of time last year.  While this is a great step for the Postal Service in starting to finally recognize the needs and issues of catalogers, it should by no means be the key factor in deciding whether or not to increase prospecting. Right now, regardless of an incentive, this is the best time to build your brand. Consider the following reasons:

    •People are still spending. Go to any mall, restaurant, concert or spa and you will see people spending money. They may be spending less and being a little more careful, but they are spending – it is our nature to buy things to make us feel good. My personal example is the Jimmy Buffet concert that I attend every year. Last month 40,000 tickets were sold in less than five minutes – “If they want it, they will buy it.” There was also the time when I waited two hours for a $25 hamburger and I scanned the crowd, observing that the average age demographic was 24-45. Again, there is money to be made.

    •There are fewer catalogs in the mail right now so yours will likely get more attention and have less competition than at any time since after September 11, 2001. Making it smaller and cheaper does not necessarily mean it is better. Will making your retail store smaller and “cheaper” bring in more customers?

    •If you believe many of the economists, there are signs and reports beginning to show that consumer confidence is coming back. Again, this is a great time to position your brand, show the consumer that you are still out there and demonstrate that you are in a position to offer value. You need to be ready when the consumer is ready!

    •We all heard about the consumer’s lack of loyalty. Many of our analyses, however, show that if you communicate with your customers by telling your story and creating value and positive feelings on a regular basis using all channels, they will be there for you and will be less sensitive to discounts.

    •Your house files are shrinking, or at best, remaining stagnant. As we all know, this cannot be the case for much longer. You have two choices; increase prospecting effectively or lose market share and see your business decline. We have seen many catalogers go out of business in part to this short-sighted approach. Don’t forget; prospecting also means contacting inactive customers in your file who have done business with you in the past. Consumer tastes, interests, lifestyles, etc. constantly change, and in the past year, many have changed multiple times.

    •The tools and approaches that are available to help you accomplish this are more effective than ever. They are also more complex, mainly due to the fact that we now have to consider multiple channels, contact frequency, lifestyle changes, etc. These are all part of a complex equation that can be solved with assistance from your direct marketing partners.

    •Use all channels to communicate with customers. The king is not dead.  Catalogs still continue to be THE driver for sales in almost all analysis we do. More than ever, however, customers are receiving, expecting and wanting to be contacted from various channels, so you need to make sure you’re hearing what they are saying and responding accordingly.

    Now is the time to get back into the game regardless of a postal incentive. We can help you to do it right by taking a systematic approach; analyzing what has worked or hasn’t worked in the past and developing a strategy to gain market share. It is not a race, but if you don’t get to the starting line soon, you will be left behind. And by the way, if any of you have tickets for the August 29 Buffett concert I’m interested.

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