000429 Web Buyers Are Changing The Catalog World


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000429 Web Buyers Are Changing The Catalog World

  1. 1. 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
  2. 2. Web buying is the biggest trend to hit the industry in decades. <ul><li>Some catalogs see over 50% of their orders placed on the web. </li></ul><ul><li>If you don’t understand web buyers, your response rates will decay. Period. </li></ul><ul><li>Some web buyers can be mailed. Some can’t. Trick is knowing who to mail and who not to mail. </li></ul>
  3. 3. Keys To Managing Web Buyers <ul><li>Segment by channel </li></ul><ul><li>Use Matchbacks to get true results </li></ul><ul><li>Optimize your web buyers at the coop databases </li></ul><ul><li>Measure the incremental sales from mailing web buyers. </li></ul>
  4. 4. Biggest trend in catalog circulation is the influx of web buyers. <ul><li>Two kinds of web buyers -- catalog driven and pure web buyers. </li></ul><ul><li>These two kinds of web buyers respond very differently to catalog mailings. </li></ul><ul><li>Catalog driven web buyers respond like traditional catalog buyers. </li></ul><ul><li>Pure web respond very differently than traditional catalog buyers. </li></ul>
  5. 5. How do you know if your buyer file is healthy ?
  6. 6. How do you know the buyer file is healthy? <ul><li>Mailing 1,000,000 web buyers @ $2.00/catalog mailed. </li></ul><ul><li>Breakeven is $1.00/catalog mailed. </li></ul>
  7. 7. <ul><li>Segment Circulation $/Catalog Total Sales </li></ul><ul><li>Total 1,000,000 $2.00 $2,000,000 </li></ul><ul><li>Looks Healthy. </li></ul>
  8. 8. <ul><li>Segmenting your web buyers shows that your circulation is not healthy. </li></ul><ul><li>Segments Circulation $/book Sales </li></ul><ul><li>Catalog driven </li></ul><ul><li>Web buyers 400,000 $3.85 $1,540,000 </li></ul><ul><li>Pure Web buyers 600,000 $.77 $460,000 </li></ul><ul><li>60% of the circulation is well below breakeven! </li></ul><ul><li>Breakeven is $1.00/catalog </li></ul>
  9. 9. <ul><li>Catalog circulation managers need good data to make decisions. </li></ul><ul><ul><li>Traditional catalogers are wasting circulation! </li></ul></ul><ul><li>Pure web companies need to understand web buyers. </li></ul><ul><ul><li>Pure web merchants are leaving sales on the table! </li></ul></ul>
  10. 10. Web buyers are different than traditional mail order buyers . <ul><li>They come to you without source codes. </li></ul><ul><li>Web buying is really a different shopping experience. </li></ul><ul><li>Catalogs sell products. The web takes orders. </li></ul>
  11. 11. How are web buyers different? <ul><li>Some web buyers respond to follow-up catalogs, direct mail or e-mails and are truly multichannel buyers. </li></ul><ul><li>Some web buyers are very unresponsive to “snail mail.” </li></ul>
  12. 12. The key requirement to manage your web buyers is to segment buyers by channel. <ul><li>Expand traditional segmentation from RFM (recency / frequency / monetary) to RFM & C . </li></ul><ul><ul><li>You must segment your buyers by Channel . </li></ul></ul><ul><li>Segment the web channel into </li></ul><ul><ul><li>pure web </li></ul></ul><ul><ul><li>catalog generated web </li></ul></ul><ul><ul><li>multichannel buyers . </li></ul></ul><ul><li>It’s not enough to just segment web buyers from call center buyers. </li></ul>
  13. 13. Cooperative Database Tactics to Manage Web Buyers <ul><li>Optimize your web buyers. </li></ul><ul><li>Segment catalog-driven web versus pure web and optimize them to find buyers to not mail! </li></ul>
  14. 14. Optimize Your Web Buyers <ul><li>Segment Circulation $/book Strategy </li></ul><ul><li>Catalog Generated Web Buyers </li></ul><ul><li>Opto Great 300,000 $5.00/book mail more </li></ul><ul><li>Opto Good 50,000 $1.40/book mail the same </li></ul><ul><li>Opto Poor 50,000 $.80/book suppress </li></ul><ul><li>Pure Web Buyers </li></ul><ul><li>Opto Great 100,000 $3.00/book mail more </li></ul><ul><li>Opto Good 300,000 $1.20/book mail less </li></ul><ul><li>Opto Poor 200,000 $.45/book suppress </li></ul>
  15. 15.           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
  16. 16. Which web buyers do you optimize? <ul><li>Pure web buyers (all the web-driven source codes) </li></ul><ul><li>1x web buyers </li></ul><ul><li>Low-ticket web buyers </li></ul><ul><li>Web catalog requests </li></ul>
  17. 17. How do you use optimization? <ul><li>Drop the web buyers who show little or no mail order. </li></ul><ul><li>Find your breakeven points in the optimization and suppress those buyers below breakeven. </li></ul><ul><li>Change your contact frequency for web versus non-web. </li></ul>
  18. 18. Measuring response without source codes isn’t easy. Without Matchbacks, it may be impossible.
  19. 19. Is your circulation plan healthy when you don’t capture source codes on web orders? <ul><li>Segment Circulation $/Book </li></ul><ul><li>0-3m catalog orders 50,000 $4.00/catalog profit </li></ul><ul><li>0-3m web orders 25,000 $.65/catalog loss </li></ul><ul><li>4-6m catalog orders 35,000 $3.25/catalog profit </li></ul><ul><li>4-6m web orders 12,000 $.48/catalog loss </li></ul><ul><li>What are the true responses after matchback? </li></ul><ul><li>Segment Circulation $/Book </li></ul><ul><li>0-3m catalog orders 50,000 $4.00/catalog profit </li></ul><ul><li>0-3m web orders 25,000 $2.27/catalog profit </li></ul><ul><li>4-6m catalog orders 35,000 $3.25/catalog profit </li></ul><ul><li>4-6m web orders 12,000 $1.68/catalog profit </li></ul>
  20. 20. How do you segment the web buyers? <ul><li>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. </li></ul>
  21. 21. Are Web buyers buying because they got a catalog?
  22. 22. Are Web buyers buying because they got a catalog? <ul><li>Always run a mail versus no-mail test. </li></ul><ul><li>Measure the incremental sales from receiving a catalog. </li></ul><ul><li>20,000 web buyers get a catalog. 20,000 web buyers get no mailing. </li></ul><ul><li>Incremental sales are a key metric. </li></ul>
  23. 23. Tactics for Web Buyers <ul><li>Change the mix of contacts and send web buyers more e-mails and less traditional mail. </li></ul><ul><li>Segment 1x “tryers” from 2x+ “buyers.” One time web buyers may be a huge profit drain. Optimize or reactivate them. </li></ul><ul><li>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. </li></ul><ul><li>Suppress holiday web buyers during the non-holiday season. </li></ul>
  24. 24. Converting Web Catalog Requests: The rules have changed! <ul><li>Do send the catalog immediately. First class mail or expedited delivery (Mail Group or DHL). </li></ul><ul><li>Send a thank you e-mail within an hour of getting the request! </li></ul><ul><li>Give them a promotional deal to order with the first e-mail. “Convert them at birth.” </li></ul><ul><li>Send a stream of follow-up e-mails. </li></ul><ul><li>Don’t hope you can mail a web request more than one or two catalogs before they fall below breakeven. </li></ul><ul><li>Convert them in a day or a week. You don’t have 3 months to convert them anymore. </li></ul>
  25. 25. Keys To Managing Web Buyers <ul><li>Segment by channel </li></ul><ul><li>Use Matchbacks to get true results </li></ul><ul><li>Optimize your web buyers at the coop databases </li></ul><ul><li>Measure the incremental sales from mailing web buyers. </li></ul>