A Baker’s Dozen of Tests

Apr 08, 2006 1:02 AM  By

Looking for new “needlemovers” to drive sales and profits? Then consider running any or all of these tests:

  1. Measuring incremental sales to house buyer segments. This will help you determine what percentage of your house file customers would have made a purchase even if they hadn’t received a print catalog, perhaps enabling you to reduce circulation. It requires establishing a control group that you do not mail compared with a sample group that gets mailed. Be sure to test older house file segments.
  2. Measuring sales by the channel used to place the order. You’ll get very different results based on the order channel—telephone, mail, Internet. The results should guide you to the best frequency for the different types of channel buyers.
  3. Testing the most economical page counts. Are all the pages profitable? Are all the pages profitable when mailed to a prospect universe? Can you mail fewer pages and have the lower cost improve profitability over the decreased response?
  4. Testing the effect of expiration dates of promotional offers on the historical sales curve of a catalog. Review your historical sales curves vs. the sales curves that result when a promotion expires. Make sure your promotions expire close to the natural end of a catalog’s life.
  5. Testing the frequency of buyer remails. Measuring the total sales and profitability of a series of buyer contacts. “More to the best, less to the rest!” means you should test adding to the frequency of buyer contacts for the best, most-recent buyers and cutting down on the frequency of contacts to the older, less responsive buyers.
  6. Measuring micro segments by segmenting into lower-dollar segments (say $0-$25 and $26-$50) and higher-dollar segments ($250- $500, $500-$1,000, $1,000+). Segmenting into lower-dollar segments and into higher-dollar segments may reveal pockets of great response and pockets of weak response.
  7. Suppressing gift buyers by seasonality. If the Christmas season is your peak season, segment November and December holiday buyers and track their response off season and in season. This could entail testing a reduction in the frequency of off-season mailings for holiday buyers and “ship-tos.” You may also want to consider an extra mailing late in the holiday season to get last-minute gift orders and sending last-minute catalogs and e-mails to holiday Web buyers.
  8. Testing old buyers dropped by advanced list hygiene and new buyer addresses identified by list hygiene. Old buyers who have moved just won’t respond, so use every list hygiene product out there to find the old addresses and drop them. Segment new addresses and measure their response.
  9. Measuring Web response by comparing the Web transaction file to the mail file; tracking promotion redemptions; measuring sales by SKU by channel; and measuring traffic to other stores.
  10. Segmenting catalog requests by channel of request: Web, space ads, phone calls.
  11. Measuring catalog requests by the number of attempts and the methods used (catalog, e-mail, postcard offer) to convert the inquiry. If you segment requests by the number of conversion attempts (rather than when the request was received) you’ll get a much clearer picture of when to stop mailing them.
  12. Suppression by brand or type of SKU for holiday buyers. Some of your products may not be good holiday gift items, so consider suppressing brand buyers during the fourth quarter.
  13. Segmenting multibuyers by type of multi (rental to rental, rental to co-op, co-op to coop.) You’ll get very different response rates.

Jim Coogan is president of Santa Fe, NM-based consultancy Catalog Marketing Economics.