February 21, 2016

Same Metrics, Different Outcome

Here's what happened, way, way back in 2001 when you mailed a catalog (yes, your mileage will vary - and yes, vendors will have a different point of view on this topic).


Life was good! You generated $4.10 per book, 41% of the demand was organic.

Fast forward to 2006.
What do you observe? Well, productivity is in decline. But look at the organic percentages by channel. What do you see? They are the same by channel, but as demand shifts away from the phone, the effectiveness of a mailing decreases.

Here's the story in 2011.
Again ... channel shift causes the overall organic percentage to increase, causing the effectiveness of the marketing technique to decrease.

On to 2016.
The classic catalog brand now deals with a significant challenge ... productivity is down nearly 40%, the organic percentage is up to 64%, and the mix of issues dictates the following:
  • Reduce Circ.
  • Or, Reduce Pages.
Again, your mileage will vary. If your customer is 74 years old, you generate a ton of phone demand, and it's like your business operates back in 2001. But if your customer is 44 years old, the 2016 example is too conservative.

Read across the "Mail" row in each year. What is total demand among the mailed segment? It's the same, isn't it? If you depend upon flawed matchback reporting, well, to you, business is the same as it was back in 2001, right?

Flawed matchback (attribution) reporting is a big deal. If you trust matchback/attribution and don't conduct the proper tests, you are costing your company a ton of profit. Maybe that's ok with you, but if any other employee were able to hide the truth from your CEO, that employee would be in trouble, right?

This is another reason why customer acquisition efforts are so important. As time progresses, customer productivity is not dictated by marketing productivity - it's dictated by merchandise productivity. The marketer can make a big difference by planting the seeds required to bear downstream new customer fruit.