Maximizing Your Housefile Potential
We all know that the lifeblood of any catalog company is the housefile. Previous catalog buyers are the most valuable asset of any company and should be cared for to insure their maximum loyalty to your company. Now is a good time to assess the performance of your customer database. Are you maximizing the potential of your housefile? Are your customers satisfied with your services and products? What can you do to get the most out of your housefile?
Customer service is the ultimate key to customer retention, and an overall healthy housefile depends on how well you take care of your customers. There are a variety of reasons why customers discontinue purchasing from a catalog company. According to a 1999 Nielsen Group survey, approximately 14 percent of customers stop purchasing because they are dissatisfied with the quality of products and/or services. Another 68 percent discontinue buying merely because they are indifferent about a catalog’s offerings and service. People want to feel good about their purchases, so it is important to create a positive buying experience for your customers.
Let’s look at the following results of housefile performances from two comparable catalog companies. The first table is an example of a healthy housefile:
Healthy Consumer Housefile
Response Rates Average Order Revenue Per Catalog
Last 12 month buyers 7.85% $63.67 $5.00
13 to 18 month buyers 5.33% $61.41 $3.27
19 to 24 month buyers 4.51% $62.28 $2.81
25 to 30 month buyers 3.67% $59.93 $2.20
31 to 36 month buyers 3.77% $62.32 $2.35
--------- ----------- -----------
6.31% $63.12 $3.98
As you can see from the diagram above, the response rate from the housefile is 6.31 percent and the average order size is $63.l2, which yields $3.98 per catalog mailed. Note the strength of the last 12-month buyer file at $5.00 per book. Assuming the break-even point is approximately $1.50 per book, this file is a solid producer.