You’ve Got Homework!
Catalogers often look at their merchandise as a big, homogenous, undifferentiated group of products. Your database provides the ability to slice and dice those products and customers who buy inside silos of product categories in many different ways.
Beyond Square-inch Analysis
Databases contain distinct subgroups of different types of merchandise buyers. Buyers of one type of merchandise may be high-profit repeat customers; buyers of another type of product may have a much lower lifetime value.
Refine your buyer groupings and realize significant opportunities. Segmenting buyers into merchandise groups will show you how to optimize the frequency and seasonality of mailing different types of merchandise buyers. Extract the best merchandise buyers and suppress less profitable merchandise buyers. Then model the best buyers at the cooperative databases. Models built on tightly defined buyer groups deliver better response and get you the higher value customers.
Relational databases allow catalogers to data mine for the best merchandise buyers in several ways. Catalogers who know their business can search for product sweet spots by any number of criteria, including:
* customers who buy across multiple product categories;
* B-to-C vs. B-to-B buyers;
* repeat buyers vs. merchandise buyers who tend to purchase only once or only a single item but don’t convert from “triers” to “buyers”; and
* any criteria that effectively separates higher lifetime value buyers from lower lifetime value buyers.
Keep Your Housefile Clean
Use every list hygiene tool available, and make sure your database files are updated and cleaned at the same time the mail files are cleaned.
Maintain a database of old addresses so if old ones show up on prospecting lists they can be suppressed. Test advanced list hygiene tools to identify old addresses, bad addresses and addresses that can realize cheaper postage through address correction.