In part two of this three-part series on the analytic metrics necessary for catalogers to evaluate their multichannel businesses, this week I offer tips on how to effectively manage catalog circulation when factoring in Web buyers.
(For part 1, click here.)
In general, pure Web buyers — those customers whose demand has been created online and whose order has been placed online — respond to follow-up catalogs at a much lower rate than traditional call-center buyers and catalog-driven Web buyers. It’s typical for pure Web buyers to respond 25 percent to 75 percent less than traditional catalog buyers with the same RFM segmentation.
Therefore, if you treat pure Web buyers the same as traditional call-center buyers, one of two things will happen: You’ll either overmail or undermail your pure Web buyers or traditional call-center buyers because these buyers are different and require different circulation strategies and frequencies! Below are several tips to help you determine how best to manage circulation, factoring in the influence of Web buyers.
* Use matchbacks to measure response or sales per book for each segment. Source codes are becoming harder to capture because so many orders are being taken online in shopping carts, which often don’t capture source codes. In the good old days, catalogers could just add a percentage (say 15 percent) to their tracking reports for each segment mailed for those orders that came without source codes. This yielded a relatively accurate measurement of total demand.
But pure Web buyers respond so differently to catalogs than traditional buyers with the same RFM characteristics that you no longer can just assume a common factor of “unknown” orders for each list segment you mail. Pure Web buyers tend to place almost all follow-up orders on the Web site’s shopping cart, so these buyers will have a much lower source code capture because of the much higher proportion of orders that are flowing through your shopping cart.
It’s not uncommon for 90 percent to 95 percent of a segment of pure Web buyers’ orders to flow through your shopping cart, where a traditional buyer segment may see 50 percent to 80 percent of their orders taken in the call center with their source codes captured.
Because source code capture rates vary so dramatically between pure Web buyers and traditional catalog buyers, looking only at source code data rather than the richer data from a matchback is worse than incomplete. It’ll almost certainly be wrong in telling you the all-important metric of the relative sales and profitability of each house buyer segment you mail.
(For part 1, click here.)
In general, pure Web buyers — those customers whose demand has been created online and whose order has been placed online — respond to follow-up catalogs at a much lower rate than traditional call-center buyers and catalog-driven Web buyers. It’s typical for pure Web buyers to respond 25 percent to 75 percent less than traditional catalog buyers with the same RFM segmentation.
Therefore, if you treat pure Web buyers the same as traditional call-center buyers, one of two things will happen: You’ll either overmail or undermail your pure Web buyers or traditional call-center buyers because these buyers are different and require different circulation strategies and frequencies! Below are several tips to help you determine how best to manage circulation, factoring in the influence of Web buyers.
* Use matchbacks to measure response or sales per book for each segment. Source codes are becoming harder to capture because so many orders are being taken online in shopping carts, which often don’t capture source codes. In the good old days, catalogers could just add a percentage (say 15 percent) to their tracking reports for each segment mailed for those orders that came without source codes. This yielded a relatively accurate measurement of total demand.
But pure Web buyers respond so differently to catalogs than traditional buyers with the same RFM characteristics that you no longer can just assume a common factor of “unknown” orders for each list segment you mail. Pure Web buyers tend to place almost all follow-up orders on the Web site’s shopping cart, so these buyers will have a much lower source code capture because of the much higher proportion of orders that are flowing through your shopping cart.
It’s not uncommon for 90 percent to 95 percent of a segment of pure Web buyers’ orders to flow through your shopping cart, where a traditional buyer segment may see 50 percent to 80 percent of their orders taken in the call center with their source codes captured.
Because source code capture rates vary so dramatically between pure Web buyers and traditional catalog buyers, looking only at source code data rather than the richer data from a matchback is worse than incomplete. It’ll almost certainly be wrong in telling you the all-important metric of the relative sales and profitability of each house buyer segment you mail.
