What Is Organic Percentage, and Why Is It the Most Important Metric in Catalog Marketing?
Still Spending — but Less
Today, I help clients design and analyze similar tests. Consistently, customers who don’t receive catalogs spend money. This constant finding across all clients indicates that matchback algorithms overstate the effectiveness of catalog mailings.
The most important metric in catalog marketing is the organic percentage. This is defined as the percentage of sales that would occur if no catalogs were mailed. Say a customer segment spends $25 if six catalogs are mailed during a three-month period of time. If no catalogs are mailed, the customer segment might spend $8. This is a significant reduction in spend, but spend doesn’t drop to zero, as suggested by many of the popular matchback algorithms. The organic percentage is calculated as follows: $8 / $25 = 32 percent. Thirty-two percent of demand is organic and would occur regardless of catalog marketing, in this example.
- Companies:
- Nordstrom