August 19, 2019

Pay 'em!!!

Two weeks ago I shared this image, created via one of my "bifurcation" projects.

The image was part of a series outlining how old-school catalog brands possess a customer base that is splitting into two pieces ... traditional catalogs shoppers who can actually support "more" mailings (yes, more) ... and everybody else who should receive considerably fewer mailings.

There are two comments I receive when I share this feedback. The two comments sometimes happen at the same time.
  1. I don't want to mail more catalogs.
  2. I don't want to mail fewer catalogs.
I realize it's not fun to have an outsider tell you how you could make more profit. You are pummeled with outsiders telling you what to do, and frequently, the outsiders are wrong.

I also realize that way, waaaaaaaaay too many of you do not get rewarded when you make your company more profit. You work for a $50,000,000 brand that makes $2.5 million profit per year and you listen to me and you increase profitability by a half-million dollars and you don't get anything for it ... nothing ... no bonus, you get your typical cost-of-living increase ... and you watch as the digital folks climb the corporate ladder. I get it, that's not fun, and there's no financial incentive to do the right thing.

When I work on these projects with the Private Equity folks, there's a lot of financial incentive to do the right thing.

When I work on these projects with the CEO or CFO, there's a lot of financial incentive to do the right thing.

But for so many of you, there isn't a financial incentive to do the right thing. And that's sad.

Maybe the CEOs/CFOs who are reading this could change that????

August 18, 2019

Wanna See What Video Looks Like?

Courtesy of Fast Company, we learn about Trader Joe's YouTube Channel (click here).

This isn't difficult to do. It requires a modicum of creativity ... and because we've ROI'd creativity out of our businesses in a lust for digital efficiency, you might think this is hard to do.

It's not.

Go do something.

August 12, 2019

Stitch Fix Just Tells You What They Do

This is going to scoot way above the preferred mathematical levels of most readers, and that's fine. The reason for sharing this is that folks wonder why their $40,000,000 business isn't growing while Stitch Fix went from zero to a billion in sales in no time at all ... now granted, Stitch Fix needs humans with taste and they need cute merch ... but they also leverage math. And they tell you what they're doing ... almost daring you to copy them.

It's all there for you (or for you to get Cohere One or Belardi/Wong to do for you) ... just copy them ... you keep asking me for best practices, well, go get your favorite catalog agency to copy this for you. Just ask them.

Here's the link (click here).

August 11, 2019

Bifurcation and Shopify all in One Article

I talk frequently about catalog bifurcation ... and many readers leverage the Shopify platform. Well, you can read about the topic of bifurcation and you can read about Shopify (and Walmart and Amazon) in this article (click here).

August 07, 2019

Everybody Else

Look at everybody else ... the bottom half of the file ... there's barely any catalog profit available mailing them.

That's the future ... it's what e-commerce brands who embrace catalogs learn quickly. It's the future for catalog brands as well. You're not going to mail the vast majority of your customer file much anymore.

You may not agree with what I'm saying. That's fine. Work with your favorite agency, analyze your best "catalog" customers, and tell me what you learn, ok?

August 05, 2019

I Know, You Don't Believe Me

In this example, the best customers do the following:

(a) They spend $360 a year BECAUSE of catalog marketing (and another $200 organically without catalogs, but that's a story for another day).

(b) They receive 22.1 catalogs per year.

(c) With a profit factor of 45% and $0.70 ad cost per catalog, the customer generates $145.70 in annual profit.

A lot of you use a "rule of thumb". You add productivity at 50% to see if another mailing will work or not.

So in this case, let's do that. Except we'll add productivity at 33%.
  • $360 / 22.1 catalogs = $16.29 per catalog.
  • 33% productivity = $16.29 * 0.33 = $5.38.
  • $5.38 per book * 0.45 - $0.70 = $1.72 profit.
Let's try adding the contact at 15% productivity.

  • $360 / 22.1 catalogs = $16.29 per catalog.
  • 15% productivity = $16.29 * 0.15 = $2.44.
  • $2.44 per book * 0.45 - $0.70 = $0.40 profit.
Do you see where I'm coming from?

Run your customer data through a sim and see what the sim tells you.

You're getting this help for free ... go do something with it, ok?????

August 04, 2019


In the past three years, the simulations all show the same story ... the very best "catalog" customers are not being contacted enough.

Look at the data in this graph ... going from left to right we have increasing 12-month buyer customer quality (i.e. best customers are on the right).

The very best customers (big blue arrow) are worth an order of magnitude more than the next-best customer segment. They get just one more catalog, but are worth SIXTY (60) additional dollars of profit.

These customers should get more catalogs. Period.

Not just one or two ... quite possibly twenty (20) more catalogs per year.

It requires a complete re-thinking about how you construct a contact strategy.

It requires a complete re-thinking about how you score your customer base so that only the best "catalog" customers are treated this way.

It requires that you or your favorite agency (Cohere One, Belardi/Wong etc.) create a simulation environment so that you can plainly see how this is happening.

It requires your printer to help you develop 16-32 page dynamic catalog content (DCC) mailings with a personalized merchandise assortment.

It requires you to mail all of the remaining customers FEWER catalogs.

In other words, the process of Bifurcation is tearing the traditional 9-18 contacts per year strategy apart.
  • Old thinking = 9-18 contacts per year, with various segmentation strategies to "target" various customers.
  • Modern thinking = 30-45ish contacts per year for a small number of customers, 0-4 contacts for nearly everybody else.
I've got the data.

I've built the sims.

This is where things are headed.

I'm telling you this ... for free.

Go do something with the information, ok??

Pay 'em!!!

Two weeks ago I shared this image, created via one of my "bifurcation" projects. The image was part of a series outlining h...