Effective Customer-contact Strategies
Because 2002 may be a difficult year for many catalogers, I will focus my columns on proven business practices that currently are working for other catalogers. In this way, we can, as an industry, learn from and assist one another through these challenging times.
Determining how many times to contact your customers and prospects is one of the most common and important questions marketers ask.
But it’s not the only critical question. Discerning when and how best to contact them can help you devise an effective customer-contact strategy.
If you’ve never performed a contact strategy test or haven’t updated yours in several years, now is a good time to do so. The three questions to ask include: how often to contact customers and prospects; when to contact them; and how to contact.
How Often to Contact
If you plan a customer contact strategy correctly, you can optimize your revenues and costs. That is, you’ll find that “sweet spot” where you continue to get marginal revenue at an acceptable cost.
Once you cross that line, however, every dollar in revenue will cost too much and drive down your profitability. So the key to optimizing contacts comes first in understanding your revenue and profit objectives. Then you can discern if more contacts will drive enough revenue or profit to make them fit into your plans.
To determine your optimal contacts, test. An effective contact-strategy test takes time and effort; start now, and plan to track your results. You need at least a year and several data segments of 5,000 to 10,000 names each.
For example, if you’re currently mailing a book every eight weeks, you’ll need a segment to mail every five or six weeks, and another every 10 weeks. Create test segments in each of your major RFM (recency, frequency, monetary) categories so you can determine if there are different optimal numbers of contacts for different segments.