000429 web buyers are changing the catalog world
TRANSCRIPT
Web Buyers are Changing the Catalog World!
Jim CooganCatalog Marketing Economics
1328 Bishops Lodge RoadSanta Fe, New Mexico 87506
Web buying is the biggest trend to hit the industry in decades. Some catalogs see over 50% of their orders
placed on the web.
If you don’t understand web buyers, your response rates will decay. Period.
Some web buyers can be mailed. Some can’t. Trick is knowing who to mail and who not to mail.
Keys To Managing Web Buyers
Segment by channel
Use Matchbacks to get true results
Optimize your web buyers at the coop databases
Measure the incremental sales from mailing web buyers.
Biggest trend in catalog circulation is the influx of web buyers. Two kinds of web buyers -- catalog driven
and pure web buyers. These two kinds of web buyers respond very
differently to catalog mailings. Catalog driven web buyers respond like
traditional catalog buyers. Pure web respond very differently than
traditional catalog buyers.
How do you know if your buyer file is healthy?
How do you know the buyer file is healthy? Mailing 1,000,000 web buyers @
$2.00/catalog mailed. Breakeven is $1.00/catalog mailed.
Segment Circulation $/Catalog Total Sales
Total 1,000,000 $2.00 $2,000,000
Looks Healthy.
Segmenting your web buyers shows that your circulation is not healthy.
Segments Circulation $/book SalesCatalog drivenWeb buyers 400,000 $3.85 $1,540,000
Pure Web buyers 600,000 $.77 $460,000
60% of the circulation is well below breakeven!Breakeven is $1.00/catalog
Catalog circulation managers need good data to make decisions. Traditional catalogers are wasting
circulation! Pure web companies need to understand web
buyers. Pure web merchants are leaving sales on
the table!
Web buyers are different than traditional mail order buyers.
They come to you without source codes. Web buying is really a different shopping
experience. Catalogs sell products. The web takes
orders.
How are web buyers different?
Some web buyers respond to follow-up catalogs, direct mail or e-mails and are truly multichannel buyers.
Some web buyers are very unresponsive to “snail mail.”
The key requirement to manage your web buyers is to segment buyers by channel.
Expand traditional segmentation from RFM (recency / frequency / monetary) to RFM & C. You must segment your buyers by Channel.
Segment the web channel into pure web catalog generated web multichannel buyers.
It’s not enough to just segment web buyers from call center buyers.
Cooperative Database Tactics toManage Web Buyers
Optimize your web buyers. Segment catalog-driven web versus pure web
and optimize them to find buyers to not mail!
Optimize Your Web Buyers
Segment Circulation $/book Strategy
Catalog Generated Web Buyers
Opto Great 300,000 $5.00/book mail more
Opto Good 50,000 $1.40/book mail the sameOpto Poor 50,000 $.80/book suppress
Pure Web Buyers
Opto Great 100,000 $3.00/book mail moreOpto Good 300,000 $1.20/book mail lessOpto Poor 200,000 $.45/book suppress
Segment Index Months Rec 12 Month Partic 12 Month Trans 12 Month Dollars
A
B 1 26.2923 0.649 0.8424 $97.09
C 5 14.56 1.2333 1.641 $206.61
D 8 9.3279 1.7988 2.5402 $315.03
E 19 6.7795 2.3572 3.4913 $434.93
F 28 5.2999 2.9988 4.5238 $534.67
G 42 4.4416 3.5093 5.4311 $660.13
H 57 3.6665 4.09 6.2977 $748.85
I 68 3.3207 4.6426 7.3141 $887.05
J 74 3.004 5.2684 8.3484 $1,012.79
K 82 2.5717 5.9747 9.54 $1,148.89
L 94 2.3694 6.8048 10.8631 $1,317.01
M 102 2.2243 7.634 12.0535 $1,494.57
N 113 2.0459 8.6721 14.0531 $1,733.78
O 122 2.3389 9.2263 14.6548 $1,833.99
P 134 2.1479 10.4616 16.6276 $2,184.58
Q 148 1.7857 12.0319 19.2269 $2,373.98
R 153 1.8673 12.8214 20.2918 $2,454.70
S 168 1.8138 14.4137 22.8926 $2,544.17
T 196 1.6184 16.3151 26.1441 $2,630.84
U 339 1.1559 22.6514 36.7909 $3,242.45
V
Which web buyers do you optimize?
Pure web buyers (all the web-driven source codes)
1x web buyers Low-ticket web buyers Web catalog requests
How do you use optimization?
Drop the web buyers who show little or no mail order.
Find your breakeven points in the optimization and suppress those buyers below breakeven.
Change your contact frequency for web versus non-web.
Measuring response without source codes isn’t easy. Without Matchbacks, it may be impossible.
Is your circulation plan healthy when you don’t capture source codes on web orders?
Segment Circulation $/Book0-3m catalog orders 50,000 $4.00/catalog profit0-3m web orders 25,000 $.65/catalog loss4-6m catalog orders 35,000 $3.25/catalog profit4-6m web orders 12,000 $.48/catalog loss
What are the true responses after matchback?
Segment Circulation $/Book0-3m catalog orders 50,000 $4.00/catalog profit0-3m web orders 25,000 $2.27/catalog profit4-6m catalog orders 35,000 $3.25/catalog profit4-6m web orders 12,000 $1.68/catalog profit
How do you segment the web buyers?
If you are doing matchbacks, you can segment the “pure web” buyers by default. All the buyers who don’t match your mail file can be “pure web” buyers.
Are Web buyers buying because they got a catalog?
Are Web buyers buying because they got a catalog?
Always run a mail versus no-mail test. Measure the incremental sales from receiving
a catalog. 20,000 web buyers get a catalog. 20,000
web buyers get no mailing. Incremental sales are a key metric.
Tactics for Web Buyers
Change the mix of contacts and send web buyers more e-mails and less traditional mail.
Segment 1x “tryers” from 2x+ “buyers.” One time web buyers may be a huge profit drain. Optimize or reactivate them.
Segment low ticket web buyers. If your lowest dollar segmentation is now $0-$50, divide that into $0-$25 and $26-$50 and measure those low ticket orders. Low ticket web orders are another profit drain.
Suppress holiday web buyers during the non-holiday season.
Converting Web Catalog Requests: The rules have changed!
Do send the catalog immediately. First class mail or expedited delivery (Mail Group or DHL).
Send a thank you e-mail within an hour of getting the request!
Give them a promotional deal to order with the first e-mail. “Convert them at birth.”
Send a stream of follow-up e-mails. Don’t hope you can mail a web request more than
one or two catalogs before they fall below breakeven. Convert them in a day or a week. You don’t have 3
months to convert them anymore.
Keys To Managing Web Buyers
Segment by channel
Use Matchbacks to get true results
Optimize your web buyers at the coop databases
Measure the incremental sales from mailing web buyers.