The Disruption Tour - Run To Survive A Social Media Revolution

Dear Catalog CEOs: Our Multichannel Mess

Kevin Hilstrom minethedata.com

Dear Catalog CEOs:

Want to have some fun? Go back to 2002, and read this roundtable interview with numerous catalog CEOs, facilitated by Catalog Age magazine.

Remember Catalog Age? A publication dedicated to catalog marketers? Well, they changed. The rebranded themselves at Multichannel Merchant, and when the world changed again, a portion of their empire evolved into The Big Fat Marketing Blog. What comes after that? But they did change with the times.

After reading the article from 2002, I don't find thinking that is significantly different than the thinking that pervades our industry in 2009. We grumble about postage. We say it is getting harder to prospect. We say that online marketers are raising the customer service expectation bar. We say that banner advertising doesn't work.

For many in the catalog industry, the phrase "multichannel" means nothing more than a bunch of channels and tactics that are there to support the continued production of catalogs.

Our industry invented the "matchback", a methodology that allows us to over-inflate catalog importance and deflate the credit we give to all other channels. At a time when all other marketers were increasing their investment in online marketing, we were allocating our investment back to the old stalwart, the catalog.

At a time when all other marketers were figuring out how to optimize landing pages, we were figuring out how to optimize printed pages.

At a time when all other marketers were using java script to dynamically generate online content based on consumer preferences, we were drinking java while dynamically figuring out how many pages had to be sent to cause an online order to happen.

At a time when all other marketers were optimizing their search marketing activities, we were searching for the best co-op to find names to send our marketing activities to.

At a time when all other marketers were learning all of the ways that customers integrated themselves with websites and social media, we integrated our websites with our retail and catalog channels, largely because our vendor partners encouraged us to do so.

We took the road less traveled by. And that has made all of the difference.

Last week, a person commenting on a blog suggested that I don't offer solutions, I just point out the obvious.

I feel like I've offered more solutions on this blog, for free, than any person in the catalog industry. Go back over the past 3-4 years and read the content, then compare it with the content from the vendors in the catalog industry. I'm trying to communicate how we can stay in business. It seems that unless the solution includes mailing a catalog, the industry doesn't perceive the solution as being viable.

Here is a laundry list of tactics, strategies, and potential solutions. Why not give a few of these a try?

1. Immediately test reduced frequency to best customers, and measure the incremental profit you achieve when reducing contact frequency.
2. Immediately test reduced pages per contact to all customers, and measure the incremental profit you achieve when reducing pages per contact.
3. Immediately calculate the "organic percentage", the percentage of demand that you will generate if you stop all catalog marketing. Calculate the profitability of your business sans catalog marketing.
4. Do not mail any catalogs next July. Instead, take your catalog investment, and allocate it across all online marketing channels. Carefully measure how customer behavior changes next July.
5. Execute mail and holdout tests in EVERY catalog, across EVERY customer segment. DO THIS NOW! Have your matchback vendor match online orders to the control group --- this quantifies how much damage your matchback vendor has done to your business by over-stating your catalog results. I cannot stress how important this is.
6. Set up a holdout group for at least six months, if not one year, and do not mail catalogs to this holdout group during this time. Within this audience, test halving your e-mail contact strategy, and test doubling your e-mail contact strategy.
7. Invest as much time on your online landing pages as you invest in catalog landing pages. Put your online landing pages up on the hallway walls of your office, just like you do with your catalog spreads, and measure the resultant profitability of every single action a customer can take on your landing pages.
8. In every meeting you have, you must spend equal time talking about catalogs and about your website. Yes, EQUAL TIME!
9. In every catalog marketing meeting you have, invite your online marketing experts in, and have them critique your catalog marketing activities. You've spent ten years having your catalog marketing experts integrate your website into your catalog business, now try doing the opposite, and see what happens.
10. Test your catalog creative, to find the style of creative that is most effective at driving customers online.
11. Test offering only best selling products in catalogs to prospects.
12. Test offering only new products in catalogs to existing customers.
13. Immediately change strategy and diversify your marketing activities if 50% or more of your online business is sourced from catalog marketing.
14. Use Multichannel Forensics to quantify if customers are likely to continue shifting online, or have finished their channel shift.
15. Optimize your catalog business for rural, 55+ year old customers who shop via the telephone.
16. Optimize your online business for EVERYBODY else.
17. Have your team create a marketing plan for a situation where you are not allowed to rent or exchange name and address without prior customer permission. More than anything else, this exercise will prepare you for the future.
18. Have your team create a marketing plan for a situation where every single catalog cost 50% more than it costs today. This exercise will prepare you for the future.
19. Develop a five year sales plan by advertising channel, if you don't already have one in place. It is irresponsible to not be prepared for the future.
20. Visit a non-competitive online e-commerce brand, and facilitate four days of knowledge exchange. On Day 1, the e-commerce brand tells you how they acquire customers. On Day 2, you explain to them how you acquire customers. On Day 3, the e-commerce brand tells you how they optimize online conversion. On Day 4, you tell them how you optimize offline conversion. Tell me you aren't going to learn something from this exercise.
21. Stop laying off your call center staff, and instead, unleash a fraction of these individuals in the social media ecosystem, sort of like how Zappos does.
22. Stop treating online customers from online advertising sources like catalog customers. Enjoy making additional profit after employing this strategy.
23. Spend more time optimizing fulfillment rates, return rates, and distribution center expenses than you spend managing social media.
24. Ask every one of your contact center and distribution center employees why they would shop from your catalog if they can find a similar product at the same price via an online brand that offers free shipping. Carefully record their responses. Change your strategy, based on their responses.
25. Spend more time with your search vendor than you spend with your co-op vendor.
26. Spend more time with your e-mail vendor than you spend with your co-op vendor.

I could go on and on, forever.

Maybe the economy will improve in 2010. Maybe customers will re-embrace catalog marketing. And maybe the old business model will thrive once again.

If those things don't happen, isn't it time to pull ourselves out of the multichannel view of the world that was so popular in 2002? If the multichannel view of the world yielded success, would so many companies be struggling, struggling long before the economy imploded or before postage increased?

As always, I am here to help you!

Thanks,
Kevin

Dear Catalog CEOs: Demographics

Kevin Hilstrom Minethedata.com

Dear Catalog CEOs:

Unless you are Miles Kimball, there are significant demographic challenges awaiting the industry.

Most commerce happens among customers age 25 - 60. Clearly, customers older than 60 purchase lots of goodies, and the 24 and under crowd have a whole different set of purchase priorities.

But the big, meaty portion of the bell curve is between 25 and 60.

And with each passing year, we transition through a new portion of the bell curve.

A 60 year old customer with catalog preferences leaves the meaty portion of the curve, replaced by somebody who just turned twenty-five.

Think about the products you sell, and the channel you choose to sell those products in. Which customer, the customer who just turned 61, or the customer who just turned 25, is more likely to buy your merchandise?

Which customer, the customer who just turned 61, or the customer who just turned 25, is more likely to be appreciative of receiving a catalog in the mail?

And then we have additional inflection points.

• Age 50 - 60 = Orders via catalogs over the telephone.
• Age 40 - 50 = Orders via catalogs online.
• Age 25 - 40 = Orders online.

The problem here is that a customer doesn't move from the 25-40 online cohort to the 40-50 cohort that orders from catalogs via your website. The advertising habits do not change as the customer ages, meaning that the 40 year old won't become more likely to become a telephone shopper in ten years.

All of this means that the audience that is receptive to catalogs is shrinking, almost unnoticeably on an annual basis, shockingly fast when viewed over the course of a decade.

I have cause for concern when I hear statements like "80% of our e-commerce orders came from customers who received a catalog in the past month." This suggests that management has a disproportionate focus on catalog marketing.

Modern cataloging is a lot like managing a 401k account. You remember the days when a financial advisor would show up at work, and strongly recommend "diversification", right? You weren't supposed to invest all of your retirement money in just one fund. You were supposed to spread your money out across numerous funds, so that if one or two of your funds collapsed, you didn't lose everything.

The exact same logic holds in modern cataloging.

We must diversify. We must cultivate an e-commerce audience that is completely independent of our loyal catalog customer following. We simply have no choice.

I recommend a target of at least 50% or more of e-commerce demand that comes from non-catalog sources.

Let me say that again: At least 50% or more of your e-commerce demand should come from non-catalog sources, or your "portfolio", if you will, is not diversified enough, leaving your business model at serious risk.

I can hear the complaints already.

• "Online customers are price sensitive, I cannot give away the store with cheapest price and free shipping, or I'll go broke."
• "Paid Search customers have poor long-term value, they only care about finding the best deal today, they are loyal to Google, not to my business."
• "E-mail marketing is awful, I only get $0.07 per e-mail message, while I get $2.77 per catalog mailed."
• "Affiliate marketing stinks, why do I have to pay those folks a commission when the customer would have purchased anyway?"
• "Social Media is completely unproven. I don't have time to tweet about my order entry system task force meetings!"
• "Mobile marketing is a fad, nobody cares about an iPhone app when they can browse the entire assortment on my website on a 23" monitor via a broadband internet connection."
• "You don't understand my customer. My customers are unique, they love catalogs."
• "You don't understand my business model, we sell widgets/gifts/apparel/books/tools, and you cannot sell those things online without paper supporting them."
• "My daughter is 27, and she loves receiving Pottery Barn catalogs in the mail. So there. I think the younger generation just needs to be trained to love print."
• "Nobody wants to read things off of a computer screen, print is a far more effective vehicle for communicating a merchandising story."
• "Our matchback vendor tells us things are just fine."

You know what? Every one of those quotes could be accurate.

But looking at the financials of catalog brands all across our great country, it doesn't seem likely that every one of those comments will align in a way that is beneficial to catalog brands. Heck, a well respected industry expert recently told me via e-mail that 1/3 of catalog brands will not exist in their current form on January 1, 2011.

Yes, this is a person that you trust, folks, a person who does not boast, and does not write content online. This is an Executive who is in the trenches with us.

Given that information, it is time to diversify. It doesn't matter that the e-commerce side of the business is less profitable or less loyal or less fun or more fickle.

We simply have no choice. It is time to diversify. Now.

As always, I am here to help you through this transition. We will get through it!

Thanks,
Kevin

Dear Catalog CEOs: Six Catalog Trends

from Kevin Hilstrom minethedata.com

Hello there, my catalog friends!

These are interesting times, aren't they?

We are truly caught between two eras. The past 100 years were very good to catalog brands. And in five or ten years, there will be a road map for the catalog brand looking to enter the future.

Between the past and the future, that's where we are stuck. We're stuck in a period where, as one business leader recently told me, "nothing works".

We know that's not true. Plenty of things work. But nothing works at a scale necessary to cause optimism.

So let's discuss six important catalog trends that help the catalog brand bridge the past and the future.

Trend #1 = Micro-Targeting: This has been talked about for decades, but we're getting closer to seeing it happen. There simply isn't a need to send a 96 page catalog that has a lot of the merchandise you love to sell when there is this thing out there called the "internet" that also has a lot of the merchandise you love to sell. We're likely to see a 96 page catalog become three or four different 56 page catalogs, with the customer receiving just one of the 56 page offerings. People are using this strategy to generate 95% of the demand on about 60% of the pages --- mathematically, folks, it works! And instead of sending remails, you can send a different 56 page version to a customer a few weeks later. I cannot predict where micro-targeting is going to take us. I can predict that catalogs will get smaller and smaller and smaller, since the website is the store and we don't need to advertise everything anymore. E-mail will continue to progress down the micro-targeting path, with more an more versions that are sent on a triggered basis. Long-term, we'll see the slow death of the "campaign" ... sure, campaigns will be here twenty years from now, but we're headed down a path that cannot be reversed anymore.

Thegies: For the first time Merchants can digitally merchandise product offers and promotions to consumers by category and subcategory communities of interest when they work with the ShoppeSimple Loyalty and Customer Acquisition Tools.

Trend #2 = Filtering: We will see a dramatic change in how a catalog brand views customers. In many of my Multichannel Forensics projects, customers fall into four buckets.

1. Catalog shoppers who order via the telephone.
2. Catalog shoppers who order via the internet.
3. Online shoppers who order because of online marketing.
4. Brand buyers who like the merchandise.

It will take every ounce of energy possible to not mail catalogs to online shoppers and brand buyers. But this will be essential for the catalog brand to survive the transition that is coming/happening. Honestly, if I had to communicate one thing for a cataloger to do right now, it would be to start filtering, immediately. I've been able to generate a half-million to a million dollars of profit achieved for businesses between $30,000,000 and $100,000,000 in size just by doing a reasonable job of filtering. Quite honestly, filtering may be the difference between profit and loss for many catalogers. And psychologically, it isn't easy for a cataloger to transition the mindset from a customer buying because a catalog was sent to her and a customer buying because she loves the product. This transition has to happen, and filtering is a great place to start --- especially from a profit and loss standpoint.

Thegies: Imagine if you can take the above point from Kevin and deliver product messaging (whether it is new arrivals or promotional products) several times a day, 365 days a year without opt-out. At ShoppeSimple YOU Can!. Our client has seen substantial increases in site traffic, a 5X increase in conversion over email and an increase in Average Order Value. To estimate a mature TransactionalRSS (TRSS) program from ShoppeSimple an email program is estimated to be 10% of online revenue. A mature TRSS program is estimated to a 1/3 of email revenue. And if you take 25% of this number and only pay a Pay Per Transaction fee to get the sale, we haven’t had anyone say pass. Check out shoppesimple.com for more information.

Trend #3 = Dynamic Landing Pages: Folks are doing this as well (just hit refresh when you visit Amazon.com). Merchants will submit the items they want to feature, while the rules-based system that feeds e-mail campaigns to customers will fill in the holes with customer preferences. Catalogers will not pursue the algorithmic approaches of their online brethren, and that could be acceptable as long as there is a warm story being told to the customer. Again, this isn't a new idea, but it is one that catalogers will embrace, because catalogers will understand that the merchandising of landing pages is very similar to the merchandising of spreads. In fact, any online strategy that can be made to look, from a process standpoint like, old-time cataloging will be embraced by catalogers.

Thegies: Through the ShoppeSimple Loyalty and Customer Acquisition Tools we build dynamic landing pages for every TransactionalRSS Feed we publish.

Trend #4 = Co-Op Evolution: We're going to see between one and three companies emerge (could be existing catalog co-ops, could be online co-ops, could be the big data providers, could be one of the web analytics companies), companies that focus on evaluating real-time customer behavior. This is a very different strategy than what we see today. Today's catalog co-ops are very good at massaging past purchase history across brands. Tomorrow's co-op leaders will combine web analytics data with offline data and web surfing behavior. You won't pay $0.06 for one-time access to a name. Instead, you'll pay $0.03, and you'll get to pick the contact you wish to employ --- catalog, e-mail, personalized online landing page, etc., or you'll pay $0.15 to employ a multiple micro-channel campaign (catalog + e-mail + online display ads + search optimization + ads on social media platforms). Of course, catalogers will pay about anything for the multiple micro-channel campaign. This will be transformative, especially among catalog brands targeting lapsed buyers.

Trend #5 = Frenemies And Pods: As catalog productivity continues to decline (not yours, but industry-wide), you'll see new and unusual partnerships. Expect to see contact center and distribution center consolidation --- a company in one industry (automotive parts) and a company in another industry (gifts) will share contact center and distribution center resources, human resources, information technology departments, database marketing teams, circulation teams, all in an effort to conserve back-of-the-office expenses. Customer lists and resources will be freely shared across what I call "pods", a half-dozen or dozen frenemies who leverage what each other are good at. Catalogers already share all of their customer data with each other, and private equity firms already consolidate lists and back-of-the-office operations. It's only a matter of time before frenemies form pods.

Thegies: In ShoppeSimple Feeds there are opportunities for merchants to place your ads on the iGoogle/My Yahoo Home pages, on Facebook, Twitter and on Smartphones.

Trend #6 = Organizational Transformation: A generation of catalog marketers, age 50 - 65, are getting ready to retire. Quite simply, this generation will not be replaced by individuals who have the same passion for catalog marketing that the generation of catalogers raised in the 1970 - 1995 timeframe had. During the next ten years, we will see a considerable number of business failures, because a generation of individuals used to communicating with customers age 50+ will be replaced by a generation of leaders ready to market to customers in their 30s and 40s. The disconnect (strategies for young customers, marketed to older customers) will drive down productivity, and result in organizational transformation. Leading catalog companies will recognize this well ahead of time, and will cope by developing new brands that are targeted to a younger audience, led by a younger generation of leaders. Think of a business like, say, Cuddledown of Maine, building a new online brand for a younger demographic, training younger employees to manage this business, so that when a generation of leaders and customers move on to retirement there is an infrastructure ready to replace the core business.

Thegies: We ask our clients what is the strategic and tactical direction regarding Social Media and Mobile and it is surprising how few merchants can share the strategically vision in these areas. But today Shoppesimple can help you monetize both your Social Media and Mobile strategies. Simple checkout RSSCheck.com for answers and contact information. Email [email protected]

Direct Marketing Circulation Stats

Co-op database firm Abacus recently released a study of direct marketing circulation that shows mail volume for the first quarter of 2009 decreased 19 percent vs. last year's first quarter. While both housefile and prospecting circ were down — 13 percent and 28 percent, respectively — a higher percentage of circ shifted to housefile, the report revealed.
Consider the following: In the first quarter of 2007, 54 percent of circ was devoted to housefile. That percentage swelled to 61 percent in the first quarter of 2008 and 65 percent in this year's first quarter.

From Conversion Rates To Repurchase Rates

Yes… in MoneyBall Micheal Lewis shared with us how the use of different metrics can facilitate very different outcomes for a business. Now if your online business is challenged because of this tough economy then follow this case study.

Unique Visitors counts are flat with last year according to compete.com but unfortunately their business is down because of a 20% decline in average order value (AOV). 

Now what happened after the business started working with ShoppeSimple’s SaaS technology and pushed feeds to feed subscribers everyday for the last month? They site visits have increase 20% and their average order is increasing because the consumer sees relevant offers every day, in fact 365 days a year enabling the consumer to buy larger purchases on impulse.

If you would like to know more about how ShoppeSimple can improve your online results go to RSSCheck.com and learn more. Then contact one of our Sales Consultants for a business consultation.

Kevin Hilstrom minethedata.com

In Moneyball, Michael Lewis explained how the Oakland A's, with a very low payroll, optimized wins by finding market inefficiencies. Baseball historically focused on metrics like batting average and runs batted in. Oakland focused on "on base percentage" and "slugging percentage", finding athletes who generated good outcomes in these metrics at lower-than-average salaries.

In other words, the existing best practice was to find great athletes with good batting averages and an ability to drive in runs. Oakland identified a different set of metrics, and then found players who were good at generating these metrics at a low cost. Oakland won a ton of games from 1999 - 2006, using this methodology.

In Online Marketing, we look to optimize conversion rate, and we have the best set of tools we've ever had to do this style of optimization.

But we're not making big strides in understanding how to increase customer spend over time. In other words, we work really hard to increase conversion rates, maybe from 4.1% to 4.5%. But we somehow aren't able to engage customers in a way that increases loyalty. E-commerce sales have largely grown from traffic, not from increases in repurchase rates, orders per buyer, items per order, or price per item.

In the future, growth must come from increases in repurchase rate, orders per buyer, items per order, and price per item.

So if you are an online marketer, I'm going to encourage you to evolve your thinking. I'm not going to ask you to abandon all of the metrics and optimization strategies you've historically employed. I am going to ask you to think differently.

Let's start by defining a metric. The name of the metric is "Repurchase Rate". Simply put, this metric is defined as the percentage of customers who purchased last year, and then purchase again this year. Now if your business is not an e-commerce business, then go ahead an think about whatever the "action" is that you want to maximize --- if you are Twitter, you might look at a "Re-Use Rate", how many people use your service again today, given that they used your service yesterday.

Why is "Repurchase Rate" important? Let's look at two customers. Both customers purchased one time during 2007, on December 10, 2007:

Analog, Digital, Social

by Kevin Hilstom Minethedata.com

Folks seem to be self-selecting themselves into three camps.

The first camp is the classic direct marketing crowd, rebranded as the "multichannel marketing" audience. I call this audience the "Analog" audience. This camp knows more about strategic direct marketing than anybody else in direct marketing, having been introduced to direct marketing as the credit card, the 1-800 number, and the database took prominence. This crowd reads Catalog Success and DMNews. This crowd attends ACCM and Internet Retailer. Ask this crowd to launch a new product or service, and they'll have a business plan for you in a couple of hours, one that spans multiple channels.

The second camp is what I'd call the "Digital" crowd, online marketers who burst onto the scene during the late 1990s and early part of this decade. This crowd knows more about classic online marketing than anybody. They can tell you that shopping cart abandonment is 43.84830048% if various criteria are met. They're great at SEO and Paid Search and Banner Ads, they know that the open rate on the last e-mail campaign was 22.438%. They know and love tactics. They can be strategic direct marketers, but seem to adore their form of marketing, are are willing to forego bigger opportunities to stay loyal to their niche. This crowd attends Shop.org. Ask this crowd to launch a new product or service, and they'll have your Google marketing plan coupled with an e-mail campaign strategy ready to go in just a few hours.

The third camp is what I'd call the "Social" crowd. This crowd is motivated by technology, the "shiny new toy", if you will. The shiny new toy might be an iPhone app, it might be getting 11,000 followers on Twitter, or it might be creating a viral campaign using Facebook. This person might be 55 years old, this person might be 25 years old. Ask this crowd to launch a new product or service, and you'll have your new product or service in a few hours!

What seems to be missing from the marketing departments of 2009 is a balanced representation of Analog, Digital, and Social strategy.

The traditional catalog brand spends 50 minutes of a 60 minute meeting debating whether 124 pages is better than 116, wondering if an 8 page insert will boost demand, considering whether a Wed-Fri in-home window might work better than Mon-Wed. Analog topics dominate the meeting.

The online brand struggles with driving traffic ... we'll over-think an e-mail campaign that will cause only 1 in 700 recipients to purchase, or we'll dig into our pile of 74,000 keywords to come up with micro-copy that will stimulate clicks. Digital marketers often need analog tools to drive traffic, but there's a fierce independence among this audience.

And then we have the social crowd --- everything is viral! If the product is good enough, it will stand out on its own and will create its own audience ... so let's make it free and social and then things will work. The wisdom of the digital crowd is missing, the strategy of the analog audience seldom surfaces.

In the 2010s, the opportunity exists for a leader to straddle each frontier ... analog, digital, and social. The leader doesn't have to be an expert in each area, but the leader has to hire folks proficient in each realm.

In the 2010s, the best strategies will incorporate percentages of Analog, Digital, and Social strategy.

In 2009, I sit in too many meetings where a faction with Analog, Digital, or Social experience dominates the meeting. Knowledge of the target customer, coupled with a strong mixture of varied experience, will yield positive results.

Co-Ops And Multichannel Merchant - Kevin Hillstrom

Co-Ops And Multichannel Merchant - Kevin Hillstrom

This theme came up at the ACCM conference --- response rates are down on dramatic decreases in circulation.

The concept of a "death spiral" is well known --- cut out prospecting, the business gets smaller, so you cut more, causing the business to get smaller, and next thing you know, you're out of business. It is a concept that the retention experts conveniently leave out when talking about catering to loyal customers.

What is interesting is that it is the co-ops that are dealing with the death spiral. The co-ops destroyed the list industry, and that's fine, America is all about competition and capitalism. But if the data in the article is true (30% drop in co-op names), then you have a whole new set of challenges in the catalog industry --- is there enough business to support all of the co-ops that exist today?

Modern Catalog Marketing: E-Mail Marketing or Transactional RSS

By Kevin Hilstrom/Minethedata.com.

Bold by Thegies

Many catalogers spend way too little time thinking about e-mail marketing.

Not enough and virtually none of them are thinking about how to integrate a product sydications (Transactional Rss) like RSSCheck into their marketing mix.

The modern catalog marketer views the world in a different way.

The modern catalog marketer actively tests varying combinations of catalog mailings and e-mail campaigns to comparable audiences. These folks (those who execute the tests) frequently learn a secret --- e-mail marketing is a much stronger marketing channel when catalogs don't exist.

In the rapid segmentation process, the modern catalog marketer wants to quickly assign customers into the "digital marketing" path. These customers see a reduced diet of catalogs, with the cataloger attempting to make up some of the volume with inexpensive e-mail marketing campaigns. It doesn't always work out this way, but you have to run the tests, don't you?

Using RSSCheck consumers can self-select themselves into the marketing product category of their choice. So when a Merchant delivers a product syndication feed to their Consumer, the Consumer is interested and responsive to recieve it. It is the markerters holy grail of segmentation. Opt-in, Private and Annoynomous

The modern catalog marketer uses tools like e-mail to introduce new items without having to spend money on expensive paper to subsidize awareness.

Better yet what if you can use RSSCheck to deliver New Arrivals and or Sale Merchandise multiple times a day without the fear of an opt-out from over saturation or canibalization from full price to sale buyers.

The modern catalog marketer realizes that a lack of an e-mail address results in a more likely assignment into the "traditional marketing" segment.

The modern catalog marketer has between five and twenty different versions of an e-mail campaign, assigning different customers to different versions.

The Merchant who uses RSSCheck can work with its Consumers to deliver pre-selected catagory choices. These are not picked by business intelligence engines but by the Merchant's Consumers themselves.

The modern catalog marketer uses clickstream data (i.e. what the customer looked at), merchandise purchased, recency/frequency/monetary, and customer preferences to determine which version of an e-mail campaign the customer receives.

RSSCheck provides the Merchant with real time analytics which are delivered for them in their own online dashboard. A merchant is no longer dependent on its own Analytics or lack thereof.

The modern catalog marketer does not measure e-mail campaign success by open rates, click through rates, or conversion rates. The modern catalog marketer evaluates e-mail performance based on the change in annual retention rate, and change in annual customer profitability, caused by e-mail marketing.

RSSCheck provides the analytics and our Merchants manage them as they see fit.

The modern catalog marketer is very willing to deliver a month's worth of e-mail campaigns that do not sell a single item

Conversely, the modern catalog marketer actively plans the sales per e-mail at a customer segment level, planning these metrics months in advance.

The modern catalog marketer is willing to accept $0.05 per e-mail delivered without a promotion, and is willing to forgo $0.15 per e-mail delivered with a free shipping or %-off offer.

The modern catalog marketer lets the customer determine contact frequency.

If you could speak to your customer about sale merchandise or other catagory merchandise that your Consumer self-selected and you can do it several times every day would you want to do that if the Consumer asked to hear from you? RSSCheck enables you to do just that and only for a small transaction fee of what is sold..

The modern catalog marketer gives the e-mail department a seat at the leadership table.

The modern catalog marketer knows exactly how much of paid search expense is caused by e-mail marketing, and blends that aspect of paid search expense (and conversion) into the e-mail profit and loss statement.

RSSCheck can pass along a variable for our product push syndication which allows you to see by channel how your promotions are doing. This is in addition to deliver separate real time metrics.

The modern catalog marketer runs matchback analytics with e-mail getting more priority than catalog marketing, just to understand what the results imply/suggest.

No differerent for the Product Push Channel (TRSS).

The modern catalog marketer executes a post-mortem of every single e-mail marketing campaign, analyzing every item offered in every version of the campaign. Every link in every e-mail campaign is analyzed. The merchandising, inventory, creative, web production team, online marketing team, catalog circulation team, and e-mail marketing teams are all present. The CEO participates on a quarterly basis, if not more often.

RSSCheck provides real time reporting for every client and it is included in your base service (for a limited time) fee. A merchant can see daily number of subscribers, click through by feed, landing pages, conversions by feed and total dollars sold.

The modern catalog marketer tests every possible creative treatment, blatantly disregarding established best practices in an endless thirst to discover new and exciting ways to present merchandise.

RSSCheck can help Merchants build customized landing pages and develop work arounds for challenges Merchants have in their own online channel selling channels.

The modern catalog marketer realizes that e-mail marketing is about merchandising and service, not about geeky metrics and tactics.

At RSSCheck we provide a Relationship Manager assigned to each Merchant client who helps them navigat all aspects of their Transactional Product Push Syndication business.

The modern catalog marketer instinctively knows how every single item will perform if offered in an e-mail campaign, and actively shares that information with every employee in the company.

RSSCheck's relationship with Database Strategic Partners drives business intelligence decisions around which products to promote and when. As we are in the 365 day a year merchandise business getting this extra edge is helpful to our client's businesses.

The modern catalog marketer "households" e-mail addresses. In other words, the modern catalog marketer will combine [email protected] and [email protected], and evaluates the performance of the all e-mail marketing activities at the "household" level.

As you can see, the modern catalog marketer views e-mail very differently than the way the average catalog marketer views e-mail marketing.

And Merchant consideration of a Product Syndication Business delivered by RSSCheck is a relevant 2009 business decision just like moving into email was in 1996 to sell product along with using PPC in 2000-present to bring traffic to your website. In both cases, the early adopters leap frogged their competition. Will you be an early adopter or watch from the sidelines as your competitors Product Syndication Business managed for them by RSSCheck bullet trains by your business. For more information on RSSCheck see rsscheck.com

 

Thegies has an equity interest in RSSCheck

Secret Sauce

http://minethatdata.blogspot.com/2008/02/secret-sauce.html

Eighteen months ago, I was invited to a breakfast session on customer behavior, hosted by a large management consulting organization.

I think there were maybe seven of us who bothered to attend, four of us from Nordstrom. The session hosts waited and waited for more folks to show up. We got off to a late start.

About thirty minutes into a Powerpoint presentation typical of a breakfast session hosted by management consultants, an attendee sitting next to me raised his hand.

Attendee: "Ok, what's the secret sauce?"

Speaker: "Excuse me?"

Attendee: "Just tell me what the secret sauce is. What should I do?"

Speaker: "You should segment your customers, and market to them as unique segments".

Attendee: "Thank you".

The attendee picked up his briefcase, pushed his chair back, stood up, and walked out of the room. For the next thirty minutes, the six of us who remained progressed through another dozen Powerpoint slides.

Secret sauce.

We seemingly want to know what we can add to our existing products/services to make them great. We want this information for free. We want this information now. We want the secret sauce to work across all industries. And when somebody tells us that the secret sauce is ketchup, we're offended. Surely the secret sauce can't be ketchup, any rube can use ketchup!

Maybe this person felt that ninety minutes of his time was a fair trade for free muffins and profound enlightenment at no cost to his organization.

In the past two decades, I've rarely seen an instance where something more exotic than ketchup solved problems in a dramatic way. The biggest problem I had to fix was at Nordstrom in 2001, having to do my part to turn a $30,000,000 loss into profit in short-order.

The secret sauce?

• Have the circulation team decide who receives a clearance catalog, not the clearance merchandise manager.
• Hire experienced people to solve a problem now.
• Hire inexperienced people, and train them to solve tomorrow's problems.
• Implement a hotline program to mail catalogs to customers immediately after a first purchase.
• Replace RFM selection techniques with statistical models.
• Eliminate remail catalogs, replacing them with new creative that was more productive.
• Circulate customer acquisition catalogs below breakeven, paying back within 0-24 months.
• Evaluate housefile circulation based on incremental profit, after factoring in cannibalization.
• Mail internet customers differently than catalog customers.
• Use matchback analytics to understand how catalogs drive business to the website and to stores.
• Use test/control groups to measure incremental volume, offsetting the overstated results of matchback analytics.
• Build a routine to send multiple targeted versions of an e-mail campaign to different segments of customers.

Nothing in that list represents "secret sauce". It's ketchup and sugar and spices all blended together.

If you do all of those things well, and all of your executive counterparts do comparable things in their field of expertise, you suddenly have something that appears to be a "secret sauce" to outsiders.

Parsimony

From Kevin Hillstrom...minethedata.com

In essence, the word "parsimony" means that "less is better".

And in multichannel marketing, we look to incorporate every possible piece of information we can find, don't we?

I recall back in 1991, the "good 'ole days" at Lands' End. You submitted a request to have customer information pulled from the mainframe computer system and written to tapes. Statistical models were built off of programming code written against the mainframe computing system.

My boss, a statistically minded individual who came to Lands' End via the oil industry, built simplistic statistical models that were used to mail catalogs to Lands' End customers. He used probit models (yes, this was before SPSS and SAS had procedures for Logistic Regression ... old school!) to predict response, using recency and frequency. He used ordinary least squares to predict average order value, using historical average order value.

He multiplied his predicted response rate (0.03) by his predicted average order value ($100), yielding a predicted dollar per book ($3.00). He ranked ten million households from most productive to least productive. Our circulation managers decided who to mail based on the predicted values he generated.

He built glorified RFM models, for crying out loud!

Oh, was I excited to get my hands on this model!

At all of 26 years old, I strongly believed that complex models with many variables and many interactions would do so much better.

So I built the models, using every possible level of complexity that a mainframe computing system would tolerate.

After one year of testing (old model vs. new model, actual mail/control tests in every catalog), my models generated exactly 1% more demand than the old models generated.

1%.

Now there's nothing to sneeze at when you're talking about 1% of $500,000,000 ... the $5,000,000 of demand and $1,500,000 of profit I contributed to the company on an annual basis were appreciated by shareholders, no doubt.

But 1%?

Parsimony should be a big part of our multichannel world, but it isn't.

We make multichannel marketing so much harder than it needs to be.

In social media, we have a blog, a Facebook presence, a Twitter presence, Plurk, instant messaging, a cell phone, a business phone, multiple e-mail accounts, Friendfeed, video sites, on and on and on. We believe we have to be in twenty different places. And our most loyal followers join us on these channels ... THESE ARE OUR BEST FOLLOWERS!!

But that doesn't mean we need to be in all of these places. What would happen if we only participated in two or three social media channels? I'm not saying we shouldn't experiment ... I am saying we should be strategic marketers. What is the strategic marketing purpose of each social media channel?

Same with old-school multichannel marketing. Who says you have to keep sending out direct mail at a 1% response rate? Who says that every product has to be in every channel at the same price at all times?

And it is the same thing with our BI or Web Analytics or Statistical Modeling groups ... we simply don't need to make things so complicated --- and if we're going to make it complicated, don't tell anybody. Our executive partners have no idea what the complexity we're communicating means ... and that is bad for our career development.

Simplify.

Be parsimonious!