March 27, 2012

What Happens When We Stop Mailing Jennifer?

Yesterday, we decided to mail 70% fewer catalogs, per year, to Jasmine.  This money could easily be reinvested in a way that would be positive to the business, though if you don't want to reinvest it, fine, pocket a 13% increase in profit over five years.

But what about Jennifer, our 43 year old Google-loving online advocate?

Jennifer is influenced by catalogs, she'll go online and buy something after completing her research on Google.

Here's the base case, again.

From testing, we surmise that Jennifer will still generate 45% of demand if she is no longer mailed catalogs.  Let's see what happens when we cut back catalog mailings by 50%:

That doesn't look like a good decision, does it?

In fact, in the business I'm analyzing here, I could not find a single case where reducing catalogs to Jennifer represented a good idea, on any level.

In our example:

  • Continue to Mail Jennifer a Full Diet of Catalogs.
  • Reduce Catalogs to Jasmine by 70% per Year.

Now, honestly, in most of my Catalog PhD projects, the results are more significant than this.  We're looking at significant cuts to both Jennifer and Jasmine.  But that's not what matters, folks.  What matters is that we run a five year simulation, estimating what might happen to the business if we make key business decisions like this.

Contact me if you'd like for me to create a five year simulation like this for your business!

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