Using Your Co-ops to Maximize Profit Potential

The co-operative databases can help you cut the waste out of your circulation and offset the postage increase, and squeeze incremental profit dollars out of your circulation.

Here are some tips on how to use the co-ops to maximize the profit potential of your circulation:

  • Optimize your house buyers and catalog requests. You’ll find households to suppress from mailing because optimization identifies household with a poor history of response to e-mail offers. And optimization can find pockets of responsive households in house files segments that have fallen below breakeven and are no longer being mailed. Catalog requests are becoming a risky piece of circulation, and you need to quickly separate the true prospects from the “tire kickers.” Some Web catalog requests are of such poor quality that they can only be mailed a single time.
  • Ask your co-op database to flag those households that have moved. Use either a list hygiene product like Epsilon’s New Mover Database or Cognitive Data’s Intellidress or flag those households that have gone dormant and show no mail order activity in the past six months.
  • Optimize your prospect lists to drop the poor responding households from your vertical list rentals. Magazine subscriber lists especially can be turned from losers to winners using optimization.
  • Use balance models names to add 5,000 to 10,000 post-merge hotline names. Don’t just use balance models when you run short of names but build in an extra couple of days to each merge to give you time to add the most recent buyer names that you get from pulling a balance model.
  • Tune up your affinity models by defining the catalogs that are most like your own merchandising sweet spot and that you want to see in your models. And just as important, give the list of catalogs you don’t want to see in your affinity models. Some of your competitors may be too low-ticket or not enough like your customers, and those catalog’s customers should be suppressed when building affinity models.
  • Make sure to specify in your merge to break out the co-op-to-co-op multibuyers, the vertical-to-vertical, and the co-op-to-vertical rental list multibuyers.
  • When you segment the co-op-to-co-op multibuyers, look at the names that overlap between the models to see what percentage are duplicates between co-ops. Then look at the unique single names being served up by the co-ops and look closely at how the singles and the overlapping multibuyers respond. This will tell you if you need to be using multiple co-ops.
  • Test the co-ops’ new models against your proven control models. Pull all new models without suppressing the names from your existing control model. Then merge the new model against your control model and segment the names that are unique to each model and the names that overlap. You’ll be able to measure the response rates and list universes of the names unique to each model and the response rate of the names that are served up by both the new model and the old control model. This will tell how similar your control model is to your new model and whether you should keep the old model, switch to the new model or use both models.

Jim Coogan is president of Santa Fe, NM-based consultancy Catalog Marketing Economics

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