ACCM Show Daily: Learning from Circulation History

May 09, 2006 9:25 AM  By

Chicago–If you don’t understand your past, you won’t be aware of your future. That was the underlying theme of yesterday’s session on circulation planning and analysis, part of the Circulation Intensive here at the Annual Conference for Catalog & Multichannel Merchants (ACCM).

The more you know about your customers’ buying patterns, the better you can define your future strategies, estimate your buyer file size, and calculate your breakeven per mailing, said Michael Grant, managing director of New York-based consultancy Winterberry Group and a leader of the daylong Intensive.

When collecting and analyzing the history of previous mailings, Grant advised starting with a top-down approach, gathering results by season, by title, by book, by segment, and by source code.

From there, you need to determine which data to track (circulation, demand, net sales, costs of good sold, and variable marketing and operations expenses, for example). Then you need to know how to calculate key metrics. Grant identified dollars per book as the best historical stat to look at when deciding how many catalogs to send in the future.

Next, said Grant, it’s time to determine which mailings performed best, ranking each book based on response rate, average order, demand per order, and cost per acquisition. With that information you can create an index for comparison, calculate a breakeven demand per catalog so that you can tell at a glance what is working, and develop a SWOT (strengths, weaknesses, opportunities, and threats) analysis for each mailing.

But wait, there’s more! For each mailing, Grant advised determining how each segment performed compared with planned goals in the prior year; making sure you match back all Internet and unknown demand to catalog mail cells; deciding if remails were profitable, and if so, if you should add yet another remail; and assessing the productivity of all page increases and decreases. The next step is identifying key segment trends, as well as opportunities to add or subtract pages. Then you can calculate the cost per acquisition and profitability for each new customer source and segment.

Finally, Grant said, you should determine your payback time by tracking the productivity of single buyers over a series of mailings, and identify how you would circulate differently, looking at the number of contacts, the number of mailings, and how deeply the house file was mailed.