Predictive Tactics: Five Database Modeling Strategies
Printing and postage are big cost outlays for a catalog. A model can help you cut such costs by reducing unwanted or unnecessary circulation.
WearGuard-Crest, a large business-to-business (b-to-b) mailer in the uniforms supply industry, was able to do just that using Unica’s Affinium Model, part of the Affinium Suite for Enterprise Marketing Management. WearGuard-Crest has used Affinium to build what it calls “response-spend likelihood” models, which help it to target only those individuals likely to buy from a catalog. It’s based on past purchases, region and other demographics. The cataloger reduced its direct mail costs by $2 million last year without a reduction in response volumes, says Kelly Fiedler, director of product marketing at Unica.
Use modeling to help refine your housefile mailing strategy and guide your decision on how far to go into your file to maximize profitability. Depending on your goals, mail strategies and frequency, you could vary the mail depth accordingly, Fiedler says.
Tactic #3: Use “what-if” analyses to help you focus on the most profitable portions of your housefile or other portions of your mail file.
This is especially effective when dealing with, say, gift recipients and catalog requestors. Says Connors, “We already know these are potential buyers, and we know where they live. They have a good likelihood of being profitable customers. So by comparing them to your housefile we can look for the most similar, and therefore most likely to be profitable, segments of those groups to mail first, then next and so on.”
The same strategy can help you find new profits in your database of former buyers. Says Connors, “Look at the back of the database: your 48-month names. There’s a chance to reactivate them.”
Of course, you don’t want to mail the whole group at once, he says. It’s a tactic you test into from the model. “After you find what looks like a sweet spot, a glimmer, then test it. Then you mail a little more.”