You Make The Decision

You work for an agency that helps a catalog brand determine their circulation plan. The Circulation Director required you to execute a holdout test. You told the Circulation Director she would lose sales by doing this, she told you to execute the test regardless.

The Circulation Director asks you to analyze the results. It's been sixteen weeks since the in-home date of the catalog. Here are the results.

• Total Catalog = $4.00 per book, average, via matchback results. No prospecting.
• Profit Factor = 40%.
• Cost of the Catalog = $0.90.
• Profit per Catalog = $4.00 * 0.40 - $0.90 = $0.70 profit per book.
• Mailed Segment = $4.50.
• Holdout Segment = $2.25.
• Incremental Demand = $4.50 - $2.25 = $2.25.
• Organic Percentage = 50%.
• Total Incremental Catalog = $4.00*0.50 = $2.00.
• Profit Factor = 40%.
• Cost of the Catalog = $0.90.
• Profit per Catalog = $2.00 * 0.40 - $0.90 = ($0.10) per book ... the catalog lost money.

At your agency, you feel pressure from your partners in the paper / printing / postage world to sell the fact that catalogs matter. Look at Nordstrom! Look at Amazon! Your co-workers are skeptical of the results, your industry partners are skeptical as well.

Tell me what you communicate to your client. You can email me your answer if you like (kevinh@minethatdata.com).

You can email me as well and I'll tell you what I'd communicate to everybody.