Strategy: Decipher Web vs. Catalog Customers
Before you come to any conclusion regarding Internet buyers and how often to mail them, have your service bureau do a matchback. To prove my point, my company did the split and created a holdout panel, and found it totally worthwhile to mail Internet buyers a catalog. We created two panels of roughly 25,000 each. One panel was mailed seven times, the other only once.
The net contribution for the group mailed seven times was approximately 55 percent higher than the group mailed only once. The additional mailing expense was more than justified.
What Matchbacks Tell Us
As you should already know, a matchback is the process where your order file is “matched back” against your recent mail tapes in order to give credit to the proper source code. This tells you where the business is coming from and which key codes should be given credit for the sale — even Web orders.
When the nontraceable factor on matchbacks ranged from 15 percent to 20 percent, we could simply allocate the unattributed portion across all source codes on a proportional basis. This doesn’t work today, however. Matchbacks have shown that it isn’t appropriate to give equal weight to the housefile, inquiries, co-ops and rented lists. Every time we do a matchback, 50 percent to 75 percent of the Internet results should be allocated to the housefile, our own customers. Another 10 percent to 20 percent of these results should be allocated to rented lists. This varies based on how much prospecting you do.
Allocation is far from proportional. Matchbacks provide benefits beyond tracking Web buyers. There are often lists made up of heavier Web buyers that may look like they don’t work well, when actually they’re profitable. Without a matchback, you’d never know this, and any testing would be without reason.