ABCs of Acquisition Analysis
Until two years ago, George Michie made his career teaching high school students the basics of economics, math, physics and government. Of his move into the catalog field, Michie says, “I was ready to do something different.” Working the analytical side of marketing seemed a logical fit for his background in numbers.
At Crutchfield, Michie was hired to help the company re-think the metrics for its customer-acquisition efforts. “We had been relying on numbers with foundations more historical than analytical,” Michie recalls.
His assignment: To figure out if these really were the numbers the company should be following? He says the ultimate question a cataloger’s metrics should answer is: “If we had another $100,000 to spend, where should the money go?”
Michie says that the first step to more effective use of Crutchfield’s marketing dollars was to better understand its customer base. Crutchfield sells car audio and home theater products. Buyers tend to be men who are willing to spend on their toys. List manager Mokrynski & Associates reports that of the 466,795 12-month buyers on the cataloger’s file, 85 percent are male, and they spend an average of $250 per order.
But there are some big differences between the two buyer groups. In fact, the average home product buyer spends $350, while the average car product buyer spends $200.
“We almost consider ourselves two separate businesses,” Michie says of the company’s dual-product focus. The car audio business, the company’s traditional stronghold, has been shrinking somewhat in recent years due to car manufacturers’ efforts to outfit luxury cars with audio equipment. “We need to zero in on the unique buyers who are interested in do-it-yourself car audio,” Michie says. That has meant tighter targeting using careful housefile analysis.
Through analysis, Michie says Crutchfield learned that, “These are information junkies who want all of the specs, who read the reviews in Consumer Reports and Stereo Review magazines. We also have found that car audio folks are do-it-yourselfers; there’s a synergy between them and, say, woodworkers.”