Understanding Changes in Response Reporting

The most basic report for catalogers is the response report showing the sales for each list or list segment in a catalog drop, says Jim Coogan, president of Sante Fe, NM-based catalog consultancy Catalog Marketing Economics. The key operating metric is the dollars per catalog for each segment. If the segment performs above breakeven, it’s a winner; below breakeven the list is a loser.

But with the explosion of Web, how does that expand the response reporting of each mailing list?

According to Coogan, the first change in the response report spreadsheet is that orders are now reported by the how the orders were received. The columns of the spreadsheet include three categories—call center orders, Web orders, and total orders. Catalogers used to hear that the Web was going to replace printed catalogs. The shift away from telephone orders to orders placed through Web is dramatic. Some catalogers see more than 50% of their orders now coming through web shopping carts. The details of each category include average order, response rate, sales per catalog, and the percentage of unknowns.

Another change in the traditional response report is that buyers are segmented into channels including traditional call center buyers, multichannel buyers, Web buyers who received a catalog and then placed an order. and “pure Web” buyers who placed a Web order and had not previously received a catalog. Expanding the rows in the response spreadsheet is critical to tracking the different response rates of buyers by channel, Coogan says. Traditional RFM (recency, frequency, monetary) segmentation does not tell which channel sub segments are profitable and which are below breakeven, he notes.

The third change in response reporting is that marketers are segmenting the buyer files into even more micro segments because of the variance in response of Web buyers. Buyer files are being divided into 1X “tryers” and 2X+ “buyers” and segmented into dollar categories for smaller orders ($0-$25 and $26–$50) and larger orders ($250-$500, $501-$1000 and $1,000+) and in Holiday gift buyers versus regular season buyers.

Marketers now segment into traditional catalog subscription requests, Web requests, and reader service requests from magazines because Web requests need to be converted with a different frequency strategy than traditional catalog subscription requests. Catalogers are increasingly treat Web requests as requests for a single catalog rather than investing in a series of catalogs to a Web requester.

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