Here's What Test Results Often Look Like

It's 2025. You don't "need" to mail a catalog anymore. It might be a smart idea, yes. In 1990, you had no choice ... no catalog ... no sales. Today, you have a veritable plethora of marketing options to get a customer to your website. If you cater to a 33 year old customer, your situation is very different than catering to a 73 year old customer.

Anybody willing to execute a mail/holdout test is on the good side of the ledger.

This is essentially an average of what I see when I analyze mail/holdout tests in 2025. Ready?

The "mailed" segment received the catalog. Six weeks later (your mileage will vary) we sum all demand from all channels within the mailed segment. We do the same thing for the holdout segment ... this group of equal quality customers did not receive the catalog.

We're going to stop our discussion today with the blue number in the black box. 70%. If we take average demand in the mailed group and subtract average demand in the holdout group, we see what the catalog actually delivered ($1.90 ... not the $6.40 you'd see on a matchback report). Take the $4.50 that customers actually spent if not receiving a catalog, divide it by the $6.40 that the mailed segment spent, and we get 70%.

This figure (70%) is called the "Organic Percentage". It's the amount of business that is generated independent of a catalog. It's the most important percentage in catalog marketing ... the Organic Percentage dictates your future as a marketer.

In 1995, the Organic Percentage might have hovered around 3%.

In 2005, the Organic Percentage might have been around 20%.

In 2015, the Organic Percentage might have been around 40%.

Today, the Organic Percentage is frequently between 50% and 85% ... but there is a big "IF" ... if your digital marketing efforts are underdeveloped OR your customer is 65+ years old, your Organic Percentage will be much lower.

Let's assume your business is typical of a modern catalog-centric brand. If 50% to 85% of your sales will happen anyway, what does that mean for your business?

• Homework Assignment:  Take your catalog matchback reporting, and pretend that 60% of the results will happen anyway. Subtract 60% of reported results at a segment level, then run a p&l for each segment. Tell me what you observe: (kevinh@minethatdata.com).