May 12, 2015

Change - Across The Board

When I run a catalog optimization model (you optimize across contacts, not just within a contact, right?), I usually observe the dynamic illustrated in this image.

Current mailing strategies include a healthy dose of catalogs for most customers. We follow a 1990 thesis suggesting the customer cannot buy if the customer is not mailed.

The reality of a modern catalog strategy is outlined on the right. The best catalog customers are actually being under-mailed. Yes. Under-mailed. I know that seems impossible, but it is usually true. Your best catalog customers would happily accept a catalog every single week, if you could physically do it. Your printer will tell you that you can do this, via automation, but most of us struggle with the human element of managing that kind of workload.

Look at customers with grades of "D" and "F". These are usually younger customers, and they have moved on from catalog marketing. In fact, they never embraced catalog marketing in the first place. They buy in ways that are hard for the average catalog marketing professional to understand. Simply put, they don't need catalogs. You can save a fortune here - and if you are willing to change, you either generate more profit or you have more money to invest in what the future of your business looks like.

Then you have your "digital" web analytics data. Weight recent (i.e. past few days to 1-2 weeks ago) transactions very, very, very heavily, and kick out a hotline catalog when a lapsed customer visits your website. Trigger the catalog to the lapsed buyer - why waste money sending catalogs to unresponsive customers? Big companies have been doing this stuff for a decade. Most catalogers do not possess the capability to do this. You'll want this capability. This is one of two popular ways (online customer acquisition being the other) you overcome the reduction in mailings among "D" and "F" customers, right?

Change continues to come - across the board. Try to have fun with it!