Bottom-Feeding with Cooperative Database Models

Jun 05, 2007 7:30 AM  By

Catalogers must cut waste out of their circulation to fight the spiraling costs postage, paper and printing. A powerful tool for eliminating non-responsive names is to test the bottom of your house file reactivation models. When you take your house file of older buyers and catalog requests and optimize at a cooperative database, you’ll find thousands of names at the bottom of the model that show little or no recent mail order activity at the household. You can tell precisely where these names will fall below breakeven and should be suppressed from your mailings.

There are many reasons why a customer may be a poor prospect for you to invest in catalog mailings for future orders. And while it is difficult to know why a customer probably won’t respond, it is straightforward for the cooperative databases to rank your house file of buyers based on their recent purchase behavior across all the catalogs in their database.

Take your older house file segments and include segments that are still performing profitably. Score them at the databases, which is typically done based on the number of purchases, the recency of purchases and the total dollars the customer spent across all the catalogs in the database over the past year.

Drop the names that clearly don’t have the mail order behavior to respond well. Then pick out a test cell segment from where you think the older buyers should break even and test that segment. When you find your breakeven point inside your house file reactivation models, drop the names below the breakeven line and mail the names above breakeven.

Test even those segments that are still above breakeven to find names that are not responsive and you’ll improve your overall house file response rates dramatically.

Learn to build reactivation models and find those names at the bottom of the models that are going to respond poorly or not at all and you’ll drop wasted dollars to your bottom line.

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