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Tips & Tactics for Growing Your Company Multichannel Magic FREE Email Newsletter
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How well do you REALLY know your customers? Philosophically, do we ever REALLY know anyone? Human beings are such complex creatures that we spend millions of dollars and hours of counseling to learn about ourselves. How does a company improve their relationships with folks who don’t fully understand themselves? We group customers with similar history. We rank them by recency, frequency, and monetary value (RFM). We expand into multiple regression and neural analysis. And, we celebrate minute increases in response rates and average order. A 6% response rate = a 94% failure rate I know, I know. [sigh] It is a process that works, so we continue doing it. We look at the requirements for breakeven and aim slightly above it. We accept anything above the breakeven. And, it doesn’t seem odd that a campaign with a 94% failure rate would be considered a roaring success. Can you imagine a ball player bragging, “I hit 3 out of 50 shots!” without an accompanying laugh track? Managing a mail plan is challenging. It requires seeking bottom-line dollars in a highly competitive market and balancing the need for profitability with the desire for growth. Marketing analysis tools, like RFM and regression, are utilized because they work! They help us identify the customers most likely to order again. But, what if… What if you developed your mail plan based on individual preferences? What if you understood your customers’ needs better than anyone else? What if you used your understanding to provide individualized service? What if your customers always shopped with you first? What if response rates doubled or tripled? People are creatures of habit. This is very advantageous to direct marketers. If there is enough history, specific patterns emerge and the mail cycle can be coordinated to match. Customers may respond to specific offers, events, or timing. For example, some customers never respond to a free shipping offer and always respond to 15% off. Others order every spring and fall and never order in summer or winter. Identify the customers that are following a specific pattern and only mail to them when they are in the habit of buying. Your mailing costs will be significantly reduced without reducing sales. The time to start is now. To get started:
This process has benefits improves your mailing strategy and helps you better understand your customers. It can guide you to new sources of income. For example, if you sell a consumable product that typically has a usage life of six weeks, you might decide to mail postcards reminding customers to order. Or, create a program where the replacement is sent automatically. The return on investment is determined by comparing the typical mail plan to the revision. If you mail six catalogs per year and can change to four without affecting the sales, then you have reduced your mailing expenses 33%! What if…
Next Steps:
Improve the effectiveness of your marketing campaigns: Get your customer retention checkup Read: Is Fear of Benchmarking Costing You Money? Reduce marketing to hit-and-run customers How Much Money Do You Waste Marketing to Hit-and-Run Customers? Next Step: Check out The New Rules of Multichannel Marketing and the Multichannel Analytics Intensive Workshop Stay ahead of your competition by subscribing now. Don’t lose your competitive edge by waiting for the articles to be posted online.
It is free and guaranteed to help you profitably grow your business. If you are still undecided, check out more free articles. Thank you for stopping by for a visit. Y’all come again soon! Have a great day!
Debra Ellis - Founder P.S. Even if you don't subscribe, join our Multichannel Magic blog. We love to have commentary that that helps our industry improve. Do you like this article?
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