7 Tips for Targeting Customers

5. Build a pro forma for future mailings. Base future campaigns on past results, economic conditions (how current economic conditions will impact your business) and changes to your marketing/merchandising mix (if you increase prices, how much are you forecasting your average order value to go up?), Watson advised. Other marketing factors to consider:

* the number of pages in your catalog — Do you cut or add?

* product assortment — widen or narrow your scope?

* calendar shifts — When do Easter, Mother’s Day fall? How long is the gap between Thanksgiving and Christmas?

* paper and postage increases — What paper do you use? Can this be downgraded with minimal effect on your book? How has this year’s postal increase (3.5 percent to 5 percent for most catalogers) impacted your circulation plans?

6. Stick to a budget. Determine how much you’re able to spend to get a prospect as a customer, Anderson said. With names on your housefile, look at average order size and lifetime value. With prospects, determine cost of acquisition (sales results for one year of prospecting minus costs of goods and promotions divided by the number of new customers within that year) and average order size compared to housefile.

7. To co-op or not? When deciding whether or not to use the co-op databases for prospecting, determine if you’ll get out of them what you give up, Watson cautioned. “If you mail 2 million to 3 million names annually, and you’re only taking 100,000 names from the co-op, it’s not worth it,” she said. Prospect to a level that justifies your housefile exposure. Also consider which data is more valuable to your business — SKU level or transactional?

Referring to mail-order food buyers as an example, Watson pointed out: “The more niche business you are, the more important the SKU level data is.”