Getting your head around matchbacks 2.0

Many of us have accountants — either for ourselves or our businesses — for a simple reason: Every year the tax rules change and we simply cannot afford to make mistakes.

The same logic can and should hold true for matchbacks, the result of a process in which you connect an order/transaction to the marketing stimulus that generated the transaction. But too many merchants still don’t do this — and they need to.

For certain, not all orders can be matched back. And the marketing “stimuli” created with multiple contacts, emails, Facebook postings and Tweets, including PPC advertising efforts and other stimuli you don’t control or even know about, makes matchbacks even trickier.

But any responsible direct merchant must at all times understand what is working and what’s not.

A typical matchback process uses a cascading approach to evaluate response based on your mail dates and transaction dates. This is, ideally, done by a third-party service provider such as your mail house: You would need to gather all unmatched/unsourced orders that happened during a particular timeframe, as well as your mail files, and give the information to the data service provider. The provider will run NCOA and Address Standardization for both files to ensure the addresses are in sync.

The perfect matchback occurs when you capture the source code at the time of the transaction — either in the mail, with phone orders, on your website (PPC, SEO, email, etc), or via a mobile-based contact. But in an age of multiple contacts, immediacy of response and a knowledge that “I don’t have to use my source code,” perfection is only a dream.

Your database structure should accommodate your existing marketing channels as well as future channels. That means each channel can be clearly viewed and measured in terms of your key needs, and support the necessary fields you need for analytics. The database should also support both outgoing and incoming information — especially if you plan to outsource your matchback.

Understanding the sales source “pie”

Many of you have one main legacy source of business, whether it be your catalog or website. But if you have been in business for more than five years, your sources of sales have changed. What does your sales source “pie” look like? (It’s a pie because it is self-contained, and regardless of your sales volume in dollars, when you create this for your business, all your totals need to add up to 100%.)

Determining your source pie isn’t easy, and some of your slices may be slivers. Also, it’s a moving target — which is why you need to measure and manage this.

While the main drivers are direct mail and email, how are you crediting Facebook and Twitter? How are you really slicing your PPC efforts, especially now with PPC “inflation” far greater than anything the U.S. Postal Service is throwing our way? How are you sourcing your SEO efforts?

Before one actually converts to a customer, there may be multiple points of engagement along the way, depending on your business and the time of year. Gone are the days when people respond to a single direct marketing contact. Affiliates? Don’t get me started.

Do you know what your sales source pie looks like and is your matchback process supporting the analysis? Do you know what it looked like a year ago? Two years ago? What are you doing today that will influence what it will look like a year from now? What is your ROI by slice? Have you considered mobile in the mix?

Metrics that matter

Given the radical changes in the way we do business, we need to translate several metrics we have come to know within this industry into today’s multichannel vernacular. So response per circ needs to become a different metric that is still a barometer for ROI.

For many, the most critical measure to be evaluated is your catalog’s investment. Marketers need to do a better job measuring overall sales effectiveness, which has been the subject of far too many “false negatives” the past few years.

If you use item suffixes (i.e. 135848C), you can review these items from the “quick order” section of your website. How many carts have “C” items with other web-only suffixed items? Email item suffixes? More than you think.

It used to be “contribution per order”; it’s now contribution per customer. Whether it is important to you over the course of a full year or by season, you need to fully understand and allocate the marketing spend of various channels to the customer and assess the return. I recommend a segmentation approach.

Is this bad for my business? As your customer is exposed to more ways to purchase from your company, your matchback process can help quantify the migration patterns and rates, especially for legacy marketers.

Once a catalog buyer does not mean always a catalog buyer. Migration analysis examines how customers interact with your business over time and should be reviewed in conjunction with an analysis of the overall contact strategy. Many of you will need to consider Facebook-sourced new customers with this in mind as part of your overall customer acquisition funnel.

Tools and approaches

Service bureau matchbacks are often available as part of the provider’s overall services. Those adept at this include Donnelley Marketing Systems/InfoGroup USA, Harte Hanks and Anchor Computer, to name a few.

Though considered by some to be a bit rudimentary, matching your Internet transactions to your catalog circulation is a tried-and-true method with a reasonable cost from the vendors, typically $1,000 to $2,500 per project.

Third-party vendors, such as Abacus’ ChannelView and Experian’s Channel Match offer tools as well. ChannelView provides merchants with timely and accurate results down to the list and segment level for several channels. ChannelMatch links your catalog circulation to Internet transactions, telemarketing, email campaigns or other promotions.

Microsoft’s “Engagement Mapping” provides the baseline for this type of analysis. The company’s process attempts to give marketers a more accurate picture of where customers are coming from — taking into account the multiple marketing “engagement points” along the way, and whether or not the merchant initiated these.

Microsoft has developed a suite of reporting solutions that goes beyond the “last click” that got the customer to your site. The shortfall is that it is one dimensional regarding the web.

Each process differs in cost, channel expertise and methodology in terms of how transactions are matched back to customers. Experian uses “merge logic,” while Abacus uses “match logic.”

Also, everyone uses different “match keys” and various tolerances for a qualified match. They are all good, but my advice is to exercise the discipline to do it regularly.

And keep in mind that things will change. I can tell you that the “pie” you understand (or think you understand) today will be different a year from now. What processes and metrics should you have in place today to manage these metrics tomorrow?

Ken Lane is principal of Hathaway & Lane Direct, a marketing consultancy based in Litchfield, CT.

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