Dear Catalog CEOs:
Here's a tidbit to help you determine if your matchback analytics are failing you.
Have your analysts freeze the customer file as of 8/15/2009. Take some random RFM segment from four years ago (46-48 month, 1x, $100 AOV). Measure online demand generated without catalog mailings, and generated via catalog mailings as identified in your matchback process. Calculate the percentage of demand generated online by catalogs (say 50%).
Now, have your analyst pull the 0-3 month, 2x+, $100 AOV (or any other high-value recent segment). Measure online demand generated without catalog mailings, and generated via catalog mailings as identified in your matchback process. Calculate the percentage of demand generated online by catalogs (say 80%).
The difference in these two metrics (50% for non-recent buyers ... 80% for high-value buyers) is highly correlated with how much your matchback analytics are over-stating the importance of the catalog.
Once you know the value of the two metrics, remove the 30% excess (in this example) from your catalog p&l at a segment level, and then calculate subsequent circulation plans based on this analysis.
Then hide your head in your hands and duck, because you won't like it when you see just how much your are over-circulating, benefiting every vendor in the catalog ecosystem, while hurting your shareholders/owner.
The transition from analytics to business can be a rather spicy endeavor. Back in January 1998, I changed jobs. No longer was I an anal...
Look at the first four rows of our life table (values of 0/1/2/3). These are the first 12-15 weeks after a customer buys for the firs...
You probably run Life Tables for your customer file, right? Right? They've been around forever ( click here for a reference f...
If you don't like geeky math, please skip this post, because I am about to show you how the sausage is made! I have eight variables in...