Sending Catalogs to Judy

You've been introduced you to three types of shoppers relevant to catalog and e-commerce marketers:

• Judy (pictured here), the 50-64 year old catalog-centric customer who enjoys catalogs more than just about any other form of marketing.
• Jennifer, the 35-49 year old online maven, one who may shop from catalogs, in fact, she may do just about anything/everything!  Jennifer, however, doesn't need 22 catalog mailings a year to make a decision ... she's the "decider", and because of this, you can save a lot of money by mailing fewer catalogs to Jennifer.
• Jasmine, the 18-34 year old master of social commerce thinks catalogs are old-school.  As Jasmine likes to say, "if it is important, it will find me".  You're not likely to make a dent sending catalogs to Jasmine.

Let's see what a typical catalog profit and loss statement looks like for Judy, the die-hard catalog shopper.

Judy tends to shop catalogs, then she picks up the phone and speaks to a customer service agent in your call center.  As a result, her sales are highly "trackable".  Judy doesn't shop online much, and if she does shop online, most of her online sales are caused by catalog marketing.  

Judy tends to be a very profitable catalog customer.

Segment folks like Judy in your database, or give me a holler and I'll do it for you!

Ladies and Gentlemen, Meet Judy

Maybe you've heard me talk about terms like "Traditioanls", "Transitionals", and "Transformationals", and you say to yourself ... "geez, I don't get it, at all."


So let's introduce Judy, pictured here.  Here's a few things you should know about Judy:

• She's 59 years old, though people like her are likely to be somewhere between 50 and 64 years old.
• She adores shopping from catalogs, always has, always will.  She reads catalogs in bed.  She is a catalog veteran.  If there were an all-star game for catalog shoppers, she'd be on the starting team.
• She's most likely to purchase over the telephone, and may even send a check through the mail (yes, people still do that).  Even now, seventeen years after e-commerce began in full force, Judy prefers to speak to a live voice, over the telephone, when giving out her credit card.
• Judy has an email address ... AOL or Yahoo! or Hotmail or via her local cable television provider.  She's not much of a Microsoft Outlook user.
• Judy is on Facebook.  She almost has to be, because that's the easiest way for her to see pictures of her grandchildren, or for her to maintain relationships with her "pen pals".
• Judy lives a few hours from the nearest "Galleria", so she's not a big mall shopper.
• Judy will pay for shipping and handling.  She doesn't spend hours looking up free shipping codes online, and has been in a multi-decade habit of paying $12.95 to have products shipped to her home.  Paying for shipping and handling is a habit for Judy.
• Judy likes the consistency of winning products, and she can be stimulated to purchase new products as well.
• Judy has a cell phone, she may even have an iPhone, but she's not likely to take part in flash sales, nor is she likely to download apps.  She just wants to play Hearts on her phone, and likes playing with various ring tones that tell her that her husband is calling.
• Judy owns a desktop computer, and only recently upgraded to DSL broadband. 
• Judy can use an iPad, she takes to it immediately, but doesn't see the reason to spend $600 to purchase one, and there's certainly no reason to buy from an iPad app when you can just pick up the phone and call somebody.
• Judy likes to use email to forward jokes and pictures of Zooborns.
• If Judy buys online, she dutifully plugs in a catalog key code off of the back of her catalog.

We can identify people like Judy, can't we?  We simply dig into our database, find customers who prefer to shop via mail/phone, find customers who live in rural areas, find customers who willing pay for shipping and handling, find customers who enter key codes online, find those with an AOL/Yahoo!/Hotmail account, and we've found "Judy"!  So go do just that, because Judy is exactly the kind of customer who wants to receive more catalogs.

A few things to keep in mind, when crafting a marketing strategy for Judy.

• Judy doesn't want to change.  She's on Facebook to see her grandchildren, not to embrace the future of F-commerce.  You will not get Judy to change channels, sorry.
• Judy doesn't want you to change the creative in your catalog, either.  She's used to what you do, your catalogs are on her coffee table, she knows you, she doesn't want change.

You look at, say, Coldwater Creek.  You visit their Twitter page, and notice that Coldwater Creek, COLDWATER CREEK, has fewer than half as many followers on Twitter as I have.  You say to yourself, if you're a pundit, "my goodness, what a complete social media failure, they don't have a clue."  That opinion is completely, utterly wrong.

No, Coldwater Creek (check Quantcast for proof) has a TON of customers like Judy ... a TON.  Judy DOES NOT CARE about Twitter.  Judy is never going to care about Twitter.  Judy just wants the darn catalog placed in her mailbox on Monday morning.  Social media pundits simply do not understand Judy.

Catalogers have come to embrace Judy, this is the niche that still raves about catalogs.  There is a ton of profit to be had within this niche for the next 5-10 years.  You, the Catalog CEO, have an opportunity to capitalize on this audience.  This is the customer your co-ops are optimizing for.

It isn't hard to identify Judy in your customer database.  It's time to get busy segmenting people like her.  Get this attribute in your database, now!!

Tomorrow, we explore the Transitional customer, whom I call "Jennifer".

But What Is A Transformational Customer?

It's not hard to understand what a Traditional customer is, especially if you're a cataloger.


And it isn't terribly hard to understand what a Transitional customer is, most of us go through this stage at one time or another ... search buyers, for instance, are about five years into the "Transitional" categorization.


The "Transformational" customer, however, is tougher to pin down.


In 1995, this customer used Netscape, had a blazing fast 9kbps internet connection, and saw that email might one day replace snail mail.


In 2001, this customer used Google, had a MySpace presence, and stuck with e-commerce even though the rest of the universe was reeling from the dot.com bust.  This person could not understand how you could spend a fortune on an iPod when there were already many highly functional MP3 players, most less expensive.


In 2005, this customer had a blog and thought that Wordpress would kill Blogger. This person suggested that podcasts could change the world, listening to many podcasts downloaded from iTunes onto an iPod.


In 2008, this customer thought that brands could offer promotions on Twitter, and couldn't understand why more brands weren't engaging in f-commerce (Facebook Commerce).  This customer understood that Dell was wise to be an early adopter of Second Life.  This customer could see that flip phones were going to be killed off by the iPhone.


And now, in the waning days of 2011, this customer uses Shopkick to get perks at a local Best Buy store, recruiting gaming friends for a new release of software, earning virtual rewards in the process.


In other words, this customer is "out there".  It's not always the same customer, but it is always a customer operating on the fringe of your business.


This person sees things different than most customers see them.  This person abandons older channels for the simple pleasure of experimenting with new channels.


This customer is frequently wrong in the short term ... but is directionally right in the long term.


Our job is to identify the Transformational customer, because there is a lot of profit opportunity here.  We limit old-school marketing techniques with this customer, we experiment with this customer.


Now, I get it ... you're about to say ... "how do we identify this customer?"


Don't make it hard.  For instance, at checkout, simply ask the customer if they are on Facebook, if they are on Twitter, if they own a Smartphone.  Just this simple act pushes the peanut, folks.


Get a web analytics project on the book of work ... seek to integrated logged-on user website data with your customer data warehouse.  When the visitor comes via an iPad or iPhone, record that as a piece of "Transformational" information.


Then test your catalog and email marketing strategies across Tranditionals, Transitionals, and Transformationals.  Again, don't over-complicate this stuff, keep it simple, learn, and adapt.


Ok, time for your thoughts.  Use the comments section, send me a tweet (@minethatdata), or send me an email message.

Diagnosing Business Issues Via The 3Ts

The three T's (Traditionals, Transitionals, and Transformationals) help us understand how (or if) our business is evolving and changing.


Here's an example.  A business leader suggests that a customer shift from traditional channels to the web is costing him business.  Well, there may be truth to that, but at least we can measure how customers are truly migrating.  We'll run a query, watching how customers in the 3Ts migrate (Traditional = Mail/Phone, Transitionals = Web/Email/Search/Affiliates/Banners, Transformationals = Mobile/Social).

Ok, there's a few things we have to digest here.

1. Between last year and this year, customer counts across all segments are in decline.
2. Transitionals (primarily the online channel) actually repurchase at a higher rate than Traditionals.
3. Traditionals are not migrating to Transitionals at high rates, and if they were, the data suggests that this would be a good thing, because repurchase rates actually increase.
4. Transitionals are not migrating at high rates to Transformationals.  In other words, new channels are not capturing customer mindshare.
5. Even when this brand generates Transformational purchases, these customers head back to the Transitional segment, suggesting that the experience in the Transformational realm isn't satisfactory.
6. Customers who purchase in the Transformational realm have the highest repurchase rates, suggesting that if this brand can get customers to "stick" there, there is opportunity for heightened customer loyalty.

This is a business where customers have largely migrated from Traditional to Transitional status.  Unfortunately, customers are not taking the next step, as those who migrate from Transitional to Transformational status go back to Transitional status.

Traditionals, Transitionals, Transformationals

Sometimes, we make everything way, WAY too hard, don't we?

If you really want to simplify things, do the following:

1. Any purchase via Mail, Phone, or Online via Catalog Matchback is considered a TRADITIONAL purchase.
2. Any purchase via Email, Search, Affiliates, Banners, Retargeting, and other Online Marketing techniques is considered a TRANSITIONAL purchase. 
3. Any online purchase not attributed to any marketing, any Mobile purchase, and any Social purchase is considered a TRANSFORMATIONAL purchase.
4. Weight historical purchases ... purchases 0-12 months ago = 1.00 * Demand ... purchases 13-24 months ago = 0.50 * Demand ... purchases 25-36 months ago = 0.25 * Demand ... purchases 37+ months ago = 0.125 * Demand.
5. Multiply all historical orders by Weighted Demand.
6. The segment (traditional, transitional, transformational) that holds the most weighted historical demand is the segment that the customer is classified in.

At this point, every customer is placed into one of three segments (traditionals, transitionals, transformationals).  Now, dump this segmentation outcome into your email campaign results, your web analytics platform, and your catalog matchback algorithm.  Measure (or, as they say on Twitter, #measure) campaign performance against each customer segment.

Be prepared to be dazzled!