“How to Get the Most Profit from Your Housefile” is a surefire winner of a title for a conference session. During his session of the same name at the DMA 87th Annual Conference and Exhibition in New Orleans last week, John Lenser, president of San Francisco-based consultancy and list firm Lenser, offered plenty of suggestions on how to do just that. Among them:
* When segmenting buyers, make one of the criteria source. Don’t lump online buyers together with catalog buyers–let alone with store buyers, DRTV respondents, and buyers from other media. Separating online buyers from catalog buyers enables you to determine “incremental sales” between online buyers who are also mailed a catalog compared with those who don’t receive a catalog. You may find that the additional sales generated by a catalog mailing to Web customers aren’t enough to justify the expense of the mailing; conversely you may find that you should be mailing more of your online-only shoppers as a way of boosting their lifetime value.
* When creating categories for the “monetary” element of your recency/frequency/monetary value (RFM) models, include a category for “less than $10” even if you don’t offer any products for less than $10. (If you do sell items for, say, $8.99, make the threshold lower–say “less than $5.”) Theoretically you shouldn’t have any customers who fall within that category–but you will, Lenser said. Typically they are requesters who paid a nominal fee to receive a catalog but never ordered or who returned everything they ordered. If you don’t single them out, they could skew the results of your RFM model.
* If someone on your housefile has signed with the DMA’s Do-Not-Mail file, you can still mail to that customer, Lenser said. That person is requesting to not receive mail from marketers new to him–he’s not asking to not receive mail from companies with which he has done business. And because customers who have signed on to the DMA pander file receive far fewer competing offers, they make excellent reactivation targets. According to Lenser, for every $1.00 spent by a buyer for a given mailing, a buyer who has signed onto the pander file will spend up to $1.45.