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Articles and Presentations...

List and Data Strategies - Part 1
Published in Multichannel Merchant


Keep Remailing Your Best Buyers

Your best buyers can always withstand one more contact, says Scarsdale, NY-based catalog consultant Michael Grant: "They've bought frequently and often from you." They are generally catalog-savvy buyers and will be buying from someone else if you don't satisfy their appetite for new product. So they're anxious to receive another catalog from you.

Let's say that your best buyers provide you with an average demand per catalog of $3.00. And let's suppose that your fixed breakeven demand per catalog is around $1.50 for a catalog. As long as you can exceed your breakeven demand per catalog with another catalog, Grant says, you can generate positive contribution on this incremental mailing.

Even with a remail of a current catalog, you'll have positive contribution for the extra mailing. A good rule of thumb for remails is to expect roughly 70% of the demand you received from the original catalog. Seventy percent of $3.00 is $2.10, which is far in excess of the required $1.50 for breakeven. Therefore, you should find a way to mail one more time to your best buyers to generate extra demand and contribution.


List and Data Strategies - Part 2
Published in Multichannel Merchant


Mailing Weak Performers

In the previous issue of MULTICHANNEL MERCHANTS, Part 1 of LIST AND DATA STRATEGIES, catalog consultant Michael Grant of Scarsdale, NY-based Michael Grant Direct wrote about the wisdom of mailing an extra catalog to your best customers. The inverse is true as well: Your worst buyers -- defined as the weakest performing segment of your house file--can withstand one less contact.

"Over the past few years, many catalogers have been mailing deeper to their house file to counteract increasing catalog mailing costs and list expenses," Grant explains. "But in many cases these catalogers are mailing very inefficiently to their house file. These 'worst' buyers have bought from you infrequently at best and definitely a long time ago. While they may be catalog savvy buyers, they're not buying from you anymore."

Let's say that in your best mailing, these worst buyers provide you with an average demand per catalog of $1.50. And let's say that your breakeven demand per catalog is around $1.50 for any given mailing. "So at a minimum," Grant says, "you should drop at least one or two of these contacts for this recency/frequency/monetary [RFM] cell of your worst buyers. An added benefit of dropping a few contacts is that you should get better productivity from them in their remaining mailings."

 




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