Quantifying Your Holiday Response

Congratulations–you survived the fourth quarter! Before you let the holiday season fade in memory, take time to look back over what worked and what didn’t so that you can improve your results for the next fourth quarter will be even better. “You can use judgmental or quantitative methods to evaluate your holiday direct mail performance,” says Bill Singleton, president of Algonquin, IL-based consultancy Singleton Marketing. “You already have an unaided or slightly aided judgmental conclusion based on what you thought and saw and felt in the midst of mailing and selling and asking customers and prospects for their account numbers or key codes.” But that type of subjective information can be tough to analyze in a way that will be useful for your next holiday planning session, he continues. This is where quantitative methods are key.

The simplest way to objectively measure list performance is to have your service bureau include your holiday mail tapes as inputs along with your updated customer file as part of your spring merge/purge. This will match your new customers by name and address to the lists you mailed. “Whether your new accounts arrived through the Web or the phone, if the lists you used were up-to-date and you had NCOA run on them, the addresses they gave for you to ship their purchases are almost certain to be the ones you mailed,” Singleton says. Your service bureau can report the results of this processing by the original list codes and your account numbers, then give you a file of the matches. When you load the file and internally add your holiday sales to it you will see how productive each list selection really was. You can compare those sales to the costs of the lists and the mailings. “This calculation will give you an objective ROI figure for each source that will come in handy in seven or eight months when you start your holiday 2005 plans,” he says.

“The big pitfall to your post-holiday analysis is seasonality,” Singleton notes. “If you bulked-up your list buys you probably ventured into previously uncharted territory with new lists or new selects of familiar lists. The temptation to continue using those lists during the slower first and second quarters will lead to frustration if they don’t maintain their holiday strength. That disappointment could cause you to exclude these seasonally strong lists from your next holiday mailings.” Mailing new selects for the holidays is not a valid test of year-round potential. Test small random samples of the lists in the spring and summer to get measure their non-holiday performance.

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