e-commerce, retail, catalog, b-to-b

By Paul Miller

Web Exclusive: Predicting Response Rates for 2010

The issue facing catalog/multichannel marketers as they enter the new year is how to measure the rebound in response rates. For most, response rates have stabilized and are no longer crashing. The key to knowing where your response rates stand is to read your results very carefully. Follow these steps to get a firm grasp on what response rates your business can expect in 2010.

Look at historical results from each of your past mailings, and compare current results from your last several mailings vs. your mailings from last year within the same season.

Know that you're no better than your latest results. Don’t assume results will improve because the economy is improving. You simply don’t know how response rates will track during this recession. They may rebound like the stock market or lag like overall consumer spending. The best data, and perhaps only valid data, for future response rates are your current response rates. So read your current response rates very carefully; they're the best indicator of your available circulation universe.

Examine the response rates of individual housefile segments and outside prospecting lists. Vertical lists clearly have taken a bigger hit than co-op database lists. Co-op database lists rely heavily on recent response, so they can serve up households that are recent purchasers. Don’t just look at how your prospecting is doing overall; look at each list separately to see how it's responding.

Break your lists into singles and multis to ensure response rates from the singles make the list worth mailing. Consider suppressing singles if they fall below your breakeven.

Research promotions being run by others in your merchandise category. It used to be that you'd hold back on your own promotions because you didn’t want to train your customers to expect deals. Now, however, customers are expecting promotions. If other marketers in your merchandise space are offering promotions, entering the mail without comparable promotions of your own puts you at peril. A large segment of consumers has been trained to expect a continuous stream of promotions, so plan on testing a full range of promotion strategies.

Mail conservatively. If you miss an upswing in response, you can increase your circulation in the future. If you overmail and lose money, you may go broke or have your friendly banker pull the plug on you. Don’t overdrive your headlights; mail smart and live to fight another day.

Jim Coogan is president of Catalog Marketing Economics (www.catalogeconomics.com), a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. Reach Jim at (505) 986-9902 or coogan@earthlink.net.

In late November, we surveyed the All About ROI editorial board members and other marketing insiders to gauge their views on the year ahead. At press time on the eve of the 2009 holiday homestretch, with their hopes for a better sales outcome than 2008 looking modest at best, few saw an especially bright light shining by December. Instead, many settled in to make the appropriate adjustments for reduced demand.

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