Boston–With more prospecting channels available to multichannel merchants, deciding how to allocate your customer-acquisition funds is “a moving target,” said Rob Chapman, Internet marketing manager for gifts and housewares cataloger Miles Kimball. How to keep hitting that target was the theme of the Tuesday session “Customer Acquisition: Where to Spend Your Next Dollar in the Multichannel Marketplace.”
There was a time, said Jim Hoffman, general manager of database solutions provider CMS Direct, when marketing plans were simpler, but “a lot of direct mailers went into retail and along came the Internet, and direct mailers didn’t have a choice. People now are managing to a promotional strategy.”
Tom Fleming, vice president, account management of media brokerage services firm ParadyszMatera, said multichannel merchants need to weigh the costs of a new customer vs. customer lifetime value (LTV) over a span of one to three years. And, he added, it’s a never-ending process. “It’s a constant balancing across all channels,” he said.
At Miles Kimball, managers hold weekly meetings, which he comically referred to as an “unmerciful shift of resources,” in which the various departments contend for a set amount of marketing dollars. “As a group, we determine where that next dollar should be spent,” he said.
Apparently Paul Fredrick MenStyle has been hitting the target pretty accurately: Marketing director Scott Drayer said that the men’s apparel cataloger saw a 250% growth in new customers from 2001 to 2005. In calculating LTV, he said, you need to understand the value of each channel and of each channel’s customers.
Drayer also cautioned attendees about slashing prospecting budgets, even in the face of postal rate increases. “Don’t ever cut your prospecting budget if you don’t understand the implications downstream,” he warned.