4 Ways to Filter Customers for Profit

By Kevin Hillstrom

Catalog brands are going through a unique transition: For the better part of 15 years, they generated profit by mailing catalogs to just about everybody. They developed tools that allowed them to see the online orders generated by customers who received catalogs.

A half-generation has passed since this style of marketing developed. Today, customers who are in their prime spending years were between 25 years old and 30 years old when they acquired their first email addresses. This generation is highly multichannel.

Any time you have a cohort of customers that is highly multichannel in nature, you have tremendous opportunities for ad cost savings. Here are four tips for filtering customers for profit:

1. Filter your housefile on the basis of multiple online channels. In other words, classify customers who buy from multiple online channels — e.g., email, search, affiliates, banners, social media. These customers are moving further and further away from catalog marketing.

Often you can cut back on catalog mailings by 25 percent to 50 percent without a significant drop-off in demand generation, because these customers are now using noncatalog-based channels to place orders. Even if catalogs match back to these customers, it doesn't mean the catalog caused the orders.

2. Filter your housefile on the basis of online buyers who originally purchased via the telephone. You’ll often find that these customers have merchandise preferences that are different than the typical online buyer — merchandise preferences that are directionally similar to telephone buyers.

3. Filter your housefile on the basis of customers who only purchase via the telephone. This audience must receive catalogs in order to purchase. These customers tend to be different than standard e-commerce buyers. They're often 50 years old to 60 years old, and frequently live in suburban or rural areas. These customers are fundamentally different from urban customers and don’t have the retail shopping opportunities of the average customer.