January 13, 2008

How Do I Know When Catalog Buyers Don't Need To Receive Catalogs Anymore?

A loyal reader recently asked how he could understand when customers who shop via phone/mail and via the web are ready to forgo catalog marketing, are ready to shop on the web without a veritable plethora of paper advertising?

Good question!

For those of you who own the Multichannel Forensics book, turn to pages 72-79 for an example of the evolution of a catalog business that transitions to an online business.

One thing you can do is run the Migration Probability Table for your multichannel customers (phone/mail and web buyers during the past twelve months). Run this table for each of the past five or six years.

If your customers are ready to shop without the aid of catalog advertising, you will see at least four things happen.
  1. The "phone/mail" channel will be progressively changing modes from isolation to equilibrium to maybe even transfer mode. This means phone/mail customers are becoming less and less likely to stay within the phone/mail channel.
  2. "Phone/mail" channel loyalty will de-evolve from hybrid to acquisition mode.
  3. The "online" channel will be progressively changing modes in the opposite direction, from transfer to equilibrium to isolation.
  4. "Online" channel loyalty will evolve from acquisition to hybrid or retention mode.
It's not much more complicated than that. Once customers evolve to a point where the online channel is getting close to or is in "isolation" mode, customers are then ready to purchase without the aid of catalogs.

The folks at Catalog Choice should be advocating this analytical technique --- they'd befriend catalog brands, save trees, make catalog brands more profit, and please customers.

Everybody wins.