000429 Web Buyers Are Changing The Catalog World
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000429 Web Buyers Are Changing The Catalog World

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000429 Web Buyers Are Changing The Catalog World 000429 Web Buyers Are Changing The Catalog World Presentation Transcript

  • Web Buyers are Changing the Catalog World! Jim Coogan Catalog Marketing Economics [email_address] 505-986-9902 1328 Bishops Lodge Road Santa 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 Sales
    • Catalog driven
    • Web 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 to Manage 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 same
    • Opto Poor 50,000 $.80/book suppress
    • Pure Web Buyers
    • Opto Great 100,000 $3.00/book mail more
    • Opto Good 300,000 $1.20/book mail less
    • Opto Poor 200,000 $.45/book suppress
  •           V $3,242.45 36.7909 22.6514 1.1559 339 U $2,630.84 26.1441 16.3151 1.6184 196 T $2,544.17 22.8926 14.4137 1.8138 168 S $2,454.70 20.2918 12.8214 1.8673 153 R $2,373.98 19.2269 12.0319 1.7857 148 Q $2,184.58 16.6276 10.4616 2.1479 134 P $1,833.99 14.6548 9.2263 2.3389 122 O $1,733.78 14.0531 8.6721 2.0459 113 N $1,494.57 12.0535 7.634 2.2243 102 M $1,317.01 10.8631 6.8048 2.3694 94 L $1,148.89 9.54 5.9747 2.5717 82 K $1,012.79 8.3484 5.2684 3.004 74 J $887.05 7.3141 4.6426 3.3207 68 I $748.85 6.2977 4.09 3.6665 57 H $660.13 5.4311 3.5093 4.4416 42 G $534.67 4.5238 2.9988 5.2999 28 F $434.93 3.4913 2.3572 6.7795 19 E $315.03 2.5402 1.7988 9.3279 8 D $206.61 1.641 1.2333 14.56 5 C $97.09 0.8424 0.649 26.2923 1 B           A 12 Month Dollars 12 Month Trans 12 Month Partic Months Rec Index Segment
  • 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 $/Book
    • 0-3m catalog orders 50,000 $4.00/catalog profit
    • 0-3m web orders 25,000 $.65/catalog loss
    • 4-6m catalog orders 35,000 $3.25/catalog profit
    • 4-6m web orders 12,000 $.48/catalog loss
    • What are the true responses after matchback?
    • Segment Circulation $/Book
    • 0-3m catalog orders 50,000 $4.00/catalog profit
    • 0-3m web orders 25,000 $2.27/catalog profit
    • 4-6m catalog orders 35,000 $3.25/catalog profit
    • 4-6m 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.