By: Brenda McGowan, Client Development Director, Data Solutions
Valid recently had the opportunity to sponsor CohereOne’s “2019 Catalog and Integrated Marketing Summit” held in Philadelphia, PA, USA.
During one of the conference presentations, Travis Seaton – SVP Strategic Services and Brandan Slattery from CohereOne shared several interesting case study results to bring back to our marketing teams.
Laying the foundation of “how to properly conduct and read tests”, they utilized the ever popular Scientific Method (flashback to science class) consisting of the following key steps:
- Define the Problem
- Observe & Research
- Form a Hypothesis
- Conduct Testing
- Perform Analysis
- Form Conclusion
- Retest to Confirm Results
It is recommended that you re-test at least every 5 to 10 years to maintain accuracy. The basic rule of thumb is to create two identical panels or test groups for each variable you are testing. One to serve as the “Test” and the other as the “Control” while keeping the original list sources intact.
- When examining results, it is imperative to look at your Cost of Goods Sold, rather than pure lift in response, because you really need to look at how the additional cost of the test criteria impacted your cost per acquisition. Bringing your costs to the contribution level provides a clearer overall picture.
The presenters went on to provide various case study results from a combination of clients within the Cataloging industry. Below are some ideas you can bring to your team to test:
Paper Weight – Would lighter paper provide higher contribution per catalog and reduce costs?
- For this client, they actually found lighter paper indeed resulted in higher contribution per catalog.
Test Big Catalog vs Smaller Catalog to Prospects – Should they mail the full larger catalog to prospects or stick to a more cost effective catalog with less number of pages as a prospecting tool?
- Results show the big catalog outperformed the small catalog by 38%, perhaps due to the added selectivity of products.
Cadence Testing – How often should you market to your customers? Can you get by limiting the number of catalogs/mail pieces sent to customers? Once again examining the contribution per catalog was the key metric to monitored.
- Results revealed that your best customers based upon Recency, Frequency, and Monetary Value (RFM) should indeed continue to receive all of your mail drops, while you could effectively cut back mailing to your “Lapsed” customers (13 to 36 months). Results also proved it was not worthwhile to continue to market to the “deeply lapsed” or 36 month plus buyers, in this case.
Incremental Revenue from Catalog Mailing – how much incremental value is the catalog providing?
- Including a “hold out “ universe, found incremental lift of $925k in reactivation customers and an overall 2.3 million in incremental sales…the catalog is indeed proving itself as a viable channel!
Digital Scoring Test – For our highly digital oriented customers, do they still need to receive a postal piece? Records were scored based upon their digital behavior from 1-10, where a “10” was highly digital, (only buys via a digital channel, where first and last purchases were also made digitally).
- Results revealed ALL of the Customer Segments had positive contributions, however the highest contributions were from the HIGHLY DIGITAL universe. Interestingly, the less active digital customers they found they could effectively pull back and only mail one per season.
Postcard Retargeting – Testing how this approach differed between Customers and Prospects. By capturing browser behavior on your website, and then quickly sending out a post card offer, how effective is it between these two types of buyers?
- Hands down, it proved highly successful for Customer Records. However, the results were mixed when applied to true Prospect Records and must be tested by each client, based upon their specific offer.
Valid is proud to work with our brilliant friends at both CohereOne and Navistone. For more information on marketing testing solutions, please visit: https://valid.com/what-we-do/data-solutions/.