Make Sure You know Your Customers: A Survival Tip

Nov 18, 2008 7:31 AM  By

If you are like most of the mailers and companies that offer services to mailers in our industry, the economy has hit you like never before. While we can hope that economic conditions will get better and consumers will come out of hiding, it’s not likely to happen in the near future.

Hopefully, we will see some relief in the form of cheaper paper costs caused by the dramatic cutback in circulations that most mailers had to put into place after the postage rate increase of last year. It is not unusual for mailers to have cut back their circulations by over 25% since that unfortunate increase by the post office.

Mailers cannot just wait for things to get better, they have to take action now, and if they are to survive they need to mail much smarter. Fortunately, there is a lot of “low hanging fruit” that can be leveraged to improve mailing success and improve overall mailing profitability.

A couple of weeks ago, we received a result on a list that one of our members had mailed on a segment that would have seemed to be a “no brainer” for generating good results. The results on this list were so far off our expectations that we had to dig into the results to figure out what was going on with the performance of that list segment.

After thoroughly analyzing the list, we determined that even though it would appear to be a good match for our member’s mailing, a fairly high percentage of the names provided did not fit the mailer’s age profile or “age sweet spot.” The percentage of names on that list segment had enough of a negative impact to give us the surprising results.

This simple evaluation led us to start looking at quite a few mailings for a number of mailers, revealing findings that are both logical but also somewhat surprising. When a mailer orders names for a mailing they most likely are only receiving around 50% to 60% of the names that are in their offers’ “age sweet spot.” This seems to hold true for names provided by list exchanges and list rentals and also on cooperative database names. The good news is that this is a huge opportunity to instantly increase the overall response rate on acquisition names by 20% to 30% while costing less than $.01 per name to drop the names that don’t fit.

You can uncover this opportunity by doing some back-end analysis of prior mailings and figuring out the offers’ “age sweet spot.” Based on this analysis, the acquisition lists that need some age refinement can be identified and mailed more effectively.

Once the optimum age selections for an offer have been determined, lists can be ordered according to where age enhancements are available. Some lists are not selectable with age; in those cases the names that don’t meet the age criteria should be dropped after the merge on the lists that have been determined to need response help. In this case, the cost of the name will be fractionally more, but it is far better to pay a bit extra for a name then to mail a poor prospect an expensive catalog.

At a time when most mailers are trying to figure out a way to cut their acquisition circulation and improve overall results, this opportunity would appear to be simple and very cost effective. But make sure that you do your own analysis to figure out how well this process will work for you.

This is just the tip of the iceberg as we search for even more cost effective and productive ways to improve performance, but start with this one—it’s so simple to analyze, plus easy and cost effective to implement..

As we dig deeper into mailing performance and data on a global basis, we will share our findings, and hopefully contribute to getting this industry back on track to a healthy future for us all.

Michael Hayden is president of the American List Exchange Association.