Don’t Let the Soft Economy Stop You from Prospecting

Dec 22, 2008 9:08 PM  By

Catalog mailers are just finishing the worst six months many have ever seen in regards to consumer responsiveness. Same cell comparisons are off by 20% to 30% from 2007 and even substantial promotions haven’t enticed consumers to buy. More current house file buyers have held up better than older house file buyers, and inquiries and acquisition names have fallen off the most.

A lot of mailers are wondering how much they should plan to prospect in the coming months. Many have calculated the response shortfall they have been seeing over the last six months and have applied that to the results from spring and summer 2008 to calculate what they should be mailing in 2009. In many cases this is translating to a 20% or more reduction in acquisition circulation for spring and summer 2009.

A very big concern is the amount of three and six month buyers that are available to mail. With lower circulation levels in fall and lower response rates during the same period, the more current recency selections are substantially lower. This is clearly visible with the lists where RFM is used as selection criteria.

The circulation that comes from the various models is a different story, as there is usually no visibility by the mailer into what they are actually receiving in the way of recency this year compared to last year. This is concerning since recency is usually the most important variable within a model and the quantities that are made available from these models don’t seem to be hurt by this shortfall in more current recency buyers.

It’s a good idea to ask for recency comparisons from models taken last year to models being taken for upcoming mailings to ensure the models will hold up in performance when compared to historical results and response expectations.

Hopefully, the economy will turn around soon and we will be back to mailing more aggressively and more productively. Catalogers need to refresh their buyer files with new buyers to remain healthy and to grow. Therefore, when planning the mailings that are now being trimmed back, mailers should be mailing enough names from all of their prime sources to be able to roll out again with confidence when conditions get better. It is important to have those key exchange and rental relationships in place and to keep exploring the acquisition modeling opportunities.

With recency being so key right now, it is logical to expect that the segments with the greatest selection visibility will also have the greatest performance predictability. List exchanges will most likely once again be a much more important part of the circulation plans, at least until we are well out of this recession and the fuel of more recency and buying activity will once more be available to the modelers.

Michael Hayden is president of the American List Exchange Association.