January 13, 2019

Bifurcation

A brief detour before heading to Circulation Theory ... the detour is critical to our upcoming discussion about Circulation Theory.

One of the big stories of 2019 is "Bifurcation" ... the point or area where something branches into two different parts. I see it happening all the time in my analytical work.
  • In Retail, the customer file split five years ago into commodity/convenience/online buyers and experience/in-store buyers. Folks used to label this "omnichannel" and today they label it as the "customer experience". It's so much more important than that.
  • In E-Commerce, the customer file is spitting into old-school desktop/laptop buyers (smaller quantity) and modern phone-centric buyers (larger quantity).
  • In Catalog Marketing, the customer file split 15 years ago (catalog vs. online) ... and what is left is now "re-splitting" into high-contact buyers and low-contact buyers.
In all three cases above, the last thing you do is apply an "omnichannel approach" and offer all customers the same merchandise and same treatment in all channels ... that's the fastest way to sub-optimize your total business. You have to do the opposite of what the pundits tell you to do. Remember, pundits get paid by getting you to apply their strategies via vendors, which allows pundits and vendors to get paid. Your job is to maximize sales so that you get paid.

Instead, when your customer file is bifurcating (you measure this stuff, right?), you have to treat customers DIFFERENTLY.

Back to Catalog Theory.

In modern Catalog Marketing, you are dealing with a customer file that has bifurcated. A significant minority of customers deserve MANY/MORE catalogs ... while the vast majority of your customer base deserve FEW/NO catalogs.

A classic catalog brand with 24 in-home dates is completely sub-optimizing the entire enterprise? Why?
  • A small number of customers deserve 50 in-home dates.
  • Almost everybody else deserve 0-4 in-home dates.
In other words, the classic catalog brand needs to develop concurrent strategies to appeal to each audience.

Tomorrow, I'll share the math behind the theory.

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