Mailers have used zip tables for years to find hot areas to mail deeper and poor areas to avoid. You should consider optimizing your prospecting lists by geographic sweet spots to squeeze more profitable response from prospecting, while cutting out your catalog’s dead zones.
Develop a zip table to drop poor performing zip codes, sectional center facilities (SCF) and states by ranking your zip codes in order of performance from best to worst. A quick way to do it is to rank your SCFs (the first three digits of your zip codes) from best to worst. Or rank your states by number of customers divided by the population of each state.
The top of the list will reveal the sweet spot of geographic areas where your prospecting will perform much better than average. At the bottom of the list are those areas where response is dead and you shouldn’t waste money prospecting for new customers.
Expect to increase response 50% or more by mailing only to those prospects in the very best areas. You should also find 25% or more of the names on your prospecting lists that you should suppress because they will respond below breakeven – or not at all.
Jim Coogan is president of Santa Fe, NM-based consultancy Catalog Marketing Economics.