March 11, 2003 Volume 2 Issue 37
How Many Contacts is the "Right" Number?
Phil Minix is Executive Vice President and General Manager of J.Schmid & Assoc., Inc. Of Shawnee Mission, Kansas. Close to Kansas City.
I don't know Phil ... I do know Jack Schmid and the KC DMA group. Fine folks.
Phil wrote an article ... published a couple of times elsewhere - now here. I liked it so much I asked Phil if I could share it with you. He agreed. Here goes.
Determining how many times to contact your customers and prospects is the most common question to which marketers are seeking an answer.
This question, or a version of this question, should be asked, tested, and answered by every marketer on a continual basis. And with the methods of customer and prospect contacts continuing to increase, this question becomes even more complex. It's not as simple as how many times to contact customers and prospects, but how many times and when with a catalog, a postcard, a phone call, an e-mail, a space ad, a direct mail package, etc. If you have never performed a contact strategy test or haven't updated yours in several years, now is as good a time as any to get a good answer to the question.
The three elements of a good contact strategy are:
The answers to these questions will vary with prospects and customers.
If you plan your customer contact strategy correctly, you can optimize your
revenues and costs. In other words, you'll find that sweet spot where you continue to get marginal revenue at an acceptable cost. Once you cross that line, however, every dollar you get in revenue will cost too much and will drive down your profitability. So the key to optimizing contacts comes first in understanding your revenue and profit objectives. Then you can determine if additional contacts will drive enough revenue or profit to make them fit into your plans.
In order to determine your optimum contacts, you must test. Performing an effective contact strategy test takes time and effort, so make sure you start now and make room in your plans for tracking the results. You'll need at least a year and several segments of at least 5,000 to 10,000 names each. For example, if you are currently mailing a book every 8 weeks, you will need a segment to mail every 6 six weeks, perhaps every 5 weeks and another every 10 weeks. You should make sure that you create test segments in each of your major RFM categories so you can determine if there are different optimum numbers of contacts for different segments.
The reason you need to test for at least one year is to determine the cumulative effect of your actions. If you increase your frequency and begin mailing too frequently, it may take a few mailings for these results to begin to show measurably. Remember, if you know your revenue and profit objectives, it will be easy to determine how many contacts are right for you once you have these test results.
Knowing when to mail is a first cousin to knowing how often. With the correct testing, you will probably determine that the "how often" will change with the "when." In other words, you might mail every 4 weeks in the latter part of the year, but only be able to justify mailing every 10 weeks in the middle of the year and every 6 weeks in the beginning of the year. Depending on the category of products you sell, your timing for being in-home can dramatically effect your results.
Even before you test, you can make a good guess about your timing given the types of products you are selling, whether they have any occasional gift giving appeal and looking at the seasonality of consumers in general for purchasing that product category. If you are a member of a co-op database, there will be reporting available that will show you when customers are buying in major categories across the industry. This can be very helpful in determining your best times for prospecting, for additional contacts to customers, etc.
We often find that an overlooked time of the year for many marketers is right after the December holidays. It's counter-intuitive because most people believe that consumers are "shopped out" after the 4th quarter holidays. However, in direct mail, January is a very responsive month - usually the 2nd or 3rd most responsive of the year for many categories.
Also, when you are thinking about how often and when to contact your customers, it is important to remember that you are contacting people in groups of thousands of names. And since you are only getting 1% to 5% response rates, over 95% of the people contacted were not ready to buy, didn't find anything they wanted at that time, or didn't even open your catalog. We often think about the 5% that purchased and ask ourselves if they would be ready to purchase again so soon. Instead, that additional contact is really geared to the 95% that didn't purchase last time.
Now that we have thought about how often and when we should contact customers and prospects, we need to begin thinking about with what kind of vehicle. If you are a cataloger, there are many other ways that you might consider making a contact to customers: a post card, a mini-catalog (trim size or page count), a direct mail package, an outbound phone call, or an outbound e-mail.
All of these additional methods of contacting customers and prospects should be planned into your "overlap" of contact strategies. Especially with the advent of low cost e-mail marketing, it is important to fit those e-mails into your overall contact strategy. Let's look at a few contact options and consider the pros and cons of each. But remember - test before you rollout!
A postcard is obviously easy and quick to create and produce and will generally cost less to put into the mail than your catalog. And if it's designed well, it can stand out in the mailbox. However, the postcard does not have nearly the ability to generate revenue as a catalog would.
So, the postcard must work really hard to affect a behavior or have a lasting impact on a customer such that future behavior is affected. Again, this can only be known with testing. We recommend testing postcards as web and retail traffic generating devices and as a way to announce a special event such as a sale or a new catalog arriving. But remember you must get the necessary lift to pay for the post card program.
Smaller trim catalogs or lower page count catalogs can also be great for additional customer contacts. Again, the cost in the mail is generally less than your traditional catalog and if designed correctly, they can garner impressive dollar-per-catalog numbers. They also can work well as a web or retail traffic generator and might not cost that much more in the mail than a postcard, although the creative production costs will be higher.
Using smaller catalogs for prospects is generally not a good idea unless your main catalog is an extremely large page count book. In this case the smaller book might be more focused and easier to process for prospects. But in most cases, the smaller size doesn't develop the credibility or offer enough assortment to attract first-time buyers.
Direct Mail Packages
Many catalogers effectively use a direct mail package in off seasons or as an additional contact to customers. For example, Omaha Steaks only mails its catalog in the 4th quarter. The rest of the year they use direct mail packages and e-mails to contact their customers. The direct mail package works well if you have a few signature products that lend themselves to a single (or limited multi-) presentation format.
If your brand positioning is all about assortment and choice, a direct mail package is probably not for you. The costs of this package will most likely be comparable to your catalog, so testing will reveal if the results merit this method in your strategy. Sometimes just hitting your customers with something different will "jar" them into purchasing.
Outbound Phone Calls
Depending on your type of business, your customers and your product offering,
outbound phone calls might really increase the effectiveness of your mailings or generate additional income between mailings - especially if you are a B-to-B cataloger. Don't be afraid to call your customers to ask for the sale, but make sure you've got something compelling to offer them - a reason for making the call.
We all know about this new and exciting marketing tool. If you are not already
testing outbound emails to your customers, you should be. Many catalogers are getting impressive results from these campaigns.
Make sure that when you develop your strategy for an outbound campaign that you have something exciting to contact customers about. Each e-mail campaign should have a reason: a sale or other offer, a new product, an announcement of a catalog arriving, etc. Unlike customers being pleased to get the latest catalog in the mail just because it is "that time," e-mail customers want to know quickly why you are contacting them and what you want them to do.
In addition to tracking the results of each specific e-mail campaign, make sure you are analyzing the results of those same e-mail recipients to your other forms of marketing. Perhaps the results of your e-mail campaigns are not quite what you would like them to be, but those same people are performing 10% better when they receive the catalog. Or worse, perhaps the e-mail results look good, but you are cannibalizing the catalog results and the net effect is something less than what you had before. You'll need to know this so you can manage it effectively.
Developing and managing your contact strategy is imperative to achieving effective and optimal results for your catalog. Make sure you take into account all the complexities of frequency, timing and the methods of contact. Plan your contacts well in advance and don't forget the most important and fun part of our industry -test, test, test! (Phil Minix can be reached by phone at 1+913+236-2408. His E-mail address is email@example.com.)
"Stamp Out" Alzheimer's
The last years of my dad's life included Alzheimer's. So, when long time DMer, speaker & biz friend John Jay Daly asked me to include this news - I quickly said "yes".
The US Postal Service is being asked to create a 'semi-postal' stamp to raise funds for the Alzheimer's Association. To fight the disease that affects 4 million Americans. A petition of 50,000 signatures is needed to make an impact.
Will you please help? Visit the donated web site & sign the
Living in the present
This list has been bouncing around a while.
This time good friend Barb Caswell sent it to me. No matter if you've seen it or not, ... it is still "funny". And soooo true! EnJoy.
You know you are living in the year 2003 when:
1. Your reason for not staying in touch with family is because they do not have e-mail.
2. You have a list of 15 phone numbers to reach your family of three.
3. Your grandmother asks you to send her a JPEG file of your newborn so she can create screen saver.
4. You pull up in your own driveway and use your cell phone to see if anyone is home.
5. Every commercial on television has a web site address at the bottom of the screen.
6. You buy a computer and 3 months later it's out of date and sells for half the price you paid.
7. Leaving the house without your cell phone, which you didn't have the first 20 or 30 (or 60) years of your life, is now a cause for panic and you turn around to go get it.
8. Using real money, instead of credit or debit, to make a purchase would be a hassle and take planning.
9. You just tried to enter your password on the microwave.
10. You consider second-day air delivery painfully slow.
11. Your dining room table is now your flat filing cabinet.
12. Your idea of being organized is multiple-colored Post-it notes.
13. You hear most of your jokes via e-mail instead of in person.
14. You get an extra phone line so you can get phone calls.
15. You disconnect from the Internet and get this awful feeling, as if you just pulled the plug on a loved one.
16. You get up in the morning and go online before getting your coffee.
17. You wake up at 2 AM to go to the bathroom and check your E- mail _ on your way back to bed.
18. You start tilting your head sideways to smile. :)
19. You're reading this and nodding and laughing.
20. Even worse; you know exactly who you are going to forward this to...
As you read this I've been on the road non-stop for about 3 weeks.
This, an Anonymous Zen Proverb, just seems to fit. Hope it works for you, too.
"Only when you can be extremely pliable and
"Quotes with Direction" has been a part of my web site collection from day one. If you like quotes visit the archives ... www.rayjutkins.com/quotes/. There's a new batch up every 4 weeks.
"It IS What's Next!"
Already I've shared this story with health care organizations, a database marketing business, a direct marketing firm, a DM association - and several others. And I'm ready to bring it to your group. (Visit It IS What's Next!)
When you have a need for a 40-90 minute program, I'll give you this different, interesting, meaningful, warm and true action presentation. To your club. Your company. Your organization. Your association. Any group you have. At any place. At any time. For any reason.
ItISWhat's Next!is available to you as a Keynote Address. As a special program. As an opening or closing presentation. As a different / unique session.
Magic Marketing Minutes
That Important Guarantee
Have you ever bought anything you knew wasn't going to work? No, of course not!
You expect whatever you buy to perform.
For the most part when you buy anything you "assume" it is guaranteed. It is guaranteed to work. The service is guaranteed to be performed and you're guaranteed to be satisfied.
The product or service is suppose to work. And if it doesn't you expect it to be repaired, replaced or refunded.
Lee Iacocca has talked about the importance of a guarantee with this statement:
"If you want to be the best, you have to separate yourself from all the talk about quality. And put it in writing."
One of the most interesting guarantees I've ever seen was on the back of a rubbish truck. It went like this:
"Satisfaction guaranteed or double your garbage back."
Now, nobody wants their garbage back but think about it a minute. Don't you think that garbage man is probably the best there is?
His attitude is "I'm going to take care of my customers". He had a sense of humor about it and probably a very large and satisfied customer base.
A guarantee is very important in Direct Response. Offer one. Or as good friend
Ray Considine says: D.W.Y.P.Y.W.D. Do What You Promised You Would Do.
Guarantee your product. Guarantee your service.
by ROCKINGHAM*JUTKINS*marketing, all rights reserved.