We learned that sending catalogs to Judy is a good idea, and for good reason! Judy is a thirty-five year catalog purchasing veteran.
Judy is always going to buy from catalogs, as long as she has the money to do so. This is a BIG issue, by the way. As best I can tell, I'm the only person in catalog marketing willing to talk about the fact that the core catalog customer (Judy) is now 55+, and in many cases has begun to enter retirement. For now, we can count on Judy to pay the bills.
We can count on Jennifer (the Transitional customer) to pay the bills in the future. But she won't pay them the way we want for her to pay them.
Jennifer shops for the best deal she can find. She takes initiative, "searching" for the businesses and products that best align with her needs. Catalogs may be a source of inspiration, but they aren't a direct source of profit.
Here's what a sample catalog segment profit and loss statement looks like for a segment comprised of a lot of people like "Jennifer":
This profit and loss statement looks different than what Judy produces. Notice that Jennifer is unlikely to shop via phone/mail. She spends her money online. Her value, as a customer, is equal to Judy. But, and this is a big BUT ... Jennifer buys regardless whether you mail her a catalog or not. Look at the 3-week online column, then look at the catalog caused online column. Of the $4.25 she spent online, only $0.98 was "caused" by catalog mailings. Your database provider sometimes incorrectly allocates the $4.25 she spent online entirely to the catalog.
When you execute mail/holdout tests, you find that Jennifer is brand loyal, not catalog loyal.
And this is important, because it means that, on an annual basis, you only have to send Jennifer 3-6 catalogs a year, not the 22 catalogs a year you are currently sending her. Pocket the ad cost, pocket the profit, or re-invest it in customer acquisition if you like, but don't waste it on Jennifer!!
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