Why Matchback Allocation Can be More Miss Than Hit

May 28, 2008 2:02 AM  By

Macthbacks are important to Harry & David, but Melissa Watson, director of catalog and e-mail marketing for the food gifts merchant, admits that the company has a hard time getting a grasp of them.

But Watson is not alone. Jerry Westendorf, customer retention manager for apparel and accessories title Footsmart, said his company may be allocating too much of sales away from catalogs.

And Ray Wollen, CEO and managing consultant of Database Insight, said that he’s seen merchants fight over which channel is going to get credit for a sale. And that’s an argument that the consumer could care less about, he noted.

But all three speakers at ACCM agreed that matchback allocation is an art, not an exact science. The rules you set up for allocating a sale are most likely going to be different from the competition, and may not even be the right answer.

Why bother matchbacks in the first place? Because you need to find out what contact method most likely triggered a customer to buy. And when you determine which one led to the path of purchase, you will have a better idea how you should spend your marketing dollars.

“So if you don’t make some effort to try and source this sale back, then you’re really just working in this unknown environment, and you won’t know where to spend your advertising dollars,” Watson said. “You can’t ever be efficient that way.”

Watson said people will buy from the Harry & David Website, and even though the merchant has circulated to that consumer, it may have been a banner ad served up two weeks earlier that reminded the buyer to make a purchase.

What’s the Harry & David way? Watson said the company takes the circulation files and matches the addresses to any sale that comes in without a source code. But that’s also where reallocation comes into play, and why many multichannel merchants are struggling to find the right channel.

Or, for that matter, understand what fraction of a sale should be credited to a specific channel.

“You’ve paid to expose your customer to your brand in two or more ways. Maybe you sent them a catalog and then you also paid for a search term that they searched on. It’s one order, one sale, but what media do you source it back to?” Watson said. “Many catalogers are sourcing it back to one or the other mediums and relying on that for their circulation and online marketing decisions.”

Westendorf said it’s possible that Footsmart, has not given enough credit to the catalog, and instead considered its winning source to be the channel the actual purchase was made from. This makes a merchant think its catalog is not as important as other channels, and cut back on circulation.

Footsmart stores four source codes in its customer database for every transaction – the winning source code from the ordering processing system, the matchback code from its sourcing software service (Abacus ChannelView), the mail code entered as part of the Web checkout, and the code overwritten by Web checkout because of multiple promotions (like site pop-ups and Web coupons).

That strategy allows Footsmart to run analysis at different levels of attribution for the catalog, Westendorf said.

But Wollen says the bottom line is that consumers zigzag in and out of channels. They don’t make a distinction between Web and catalog channels, and in the end, don’t care which channel gets credit for a sale.

“Consumers call the contact center after a big session on the Web, or they go to the store, because they do their research online and then want to deal with a human being,” Wollen said. “So merchants need to reward a corporate win and not let each silo try and take full credit for a sale.”