When it comes to direct marketing, a common language isn’t the only thing separating the U.S. and the U.K. During the European Catalogue and Mail Order Days (ECMOD) conference, held in London on Nov. 23-24, the session “Developing an Effective Catalogue Circulation Strategy” revealed radically different notions on the importance of lifetime value (LTV).
Most marketing consultants and database experts in the U.S. stress the importance of calculating LTV and lament that many catalogers don’t do it. But panelists at the ECMOD circulation session–Mark Dugdale, chief executive of gardening product merchant Flying Brands; Nigel Swabey, chief executive of multititle cataloger Scotts of Stow; and Hector Vass, director of database analysis consultancy Fullgroove—viewed the value of LTV as a myth.
LTV “is not ‘value,’ it is contribution, and it’s less than you think,” Swabey said. What’s more, “no one ever waits a lifetime—it’s an illusion.” He did allow that LTV was appropriate for businesses with a stable profit stream and market, as well as for merchants selling consumables rather than gifts or discretionary items.
Panelist Vass seconded that LTV was “an illusionary luxury.” He also agreed that LTV was really contribution and noted that mailers that do calculate LTV “need to impose a strict payback period.”
The panelists were in favor of catalog remails, however, particularly to better compete with stores that are open nearly every day. “The key [with remailing] is to open more trading windows,” Vass said, as no trading windows means no trade. Remailing versions of your catalog tends to trip the memory of your customers and gets them to make a purchase, he said. “You might have had the right offer for the right customer but at the wrong time.”