Managing the Flood of Web Buyers, Part 2
Continuing my theme from last week of how the growing trend of consumers buying via the Internet has affected catalog circulation, this week I’ll take a look at how the co-op databases can play a role in your circ plans. Lots of Web buyers simply don’t respond to catalog mailings. The key is to find those buyers you shouldn’t be mailing and cut them out of your circ plans.
Here’s an example of a decision you’ll need to make when optimizing your buyers. Analyze the mail order history of the households you elect to mail and, based on their purchase history, mail them at the same, less or greater frequency. Establish a break-even point so you can determine if mailing to particular names will be profitable.
Click on the chart at the bottom of this page, which details the 20 deciles you’ll see when you optimize your buyers. The worst deciles show very poor buying history, and these households just aren’t going to respond. The top-performing deciles show very robust buying behavior, and these people will buy early and often. Would you rather mail a group that spent $97 last year in mail order purchases and whose last transaction was an average of 26 months ago, or a group that spent in excess of $3,200 last year on mail order purchases and whose most recent mail order transaction was within the past month?
Which Web buyers do you optimize? Depending on how many buyers you have, consider segmenting by the following buyer groups:
* price-comparison search engine buyers;
* all search engine buyers;
* one-time Web buyers;
* low-ticket Web buyers;
* Web catalog requesters; and
* Web holiday buyers.
All of these represent potential opportunities to cut wasted mailings.
To optimize, first find Web buyers who show little or no mail order activity and drop them from your mailing list. Then find your break-even point and suppress those buyers below breakeven.
That’s all for this week’s installment. In the third part of this series next week, I’ll show how matchbacks should be used to get a true measure of response to mailings.
Jim Coogan is president of Catalog Marketing Economics, a Santa Fe, N.M.-based consulting firm focused on catalog circulation planning. You can reach him at (505) 986-9902 or email@example.com .