Track Down Multi-buyers

Multi-buyers are the gold that all catalogers hope to uncover. These prospective buyers don’t just have a demographic propensity to purchase what you sell, they’ve proven their loyalty to catalog shopping in general. And that means they’re likely to buy by catalog again.

John Lenser, a long-time catalog industry professional whose credits include being founder of San Francisco Music Box and past president of Hearthsong, is now president of Lenser Consulting and works with catalog clients on circulation planning and list strategies. He recently shared insights into the current catalog list market and ideas on the best ways to take advantage of multi-buyer sources.

General Market Catalogs Face Greatest Challenge

The economy and market forces are impacting general market catalogs and niche businesses differently, says Lenser. “The general market catalogs are having a more challenging environment. As postage and other costs have gone up, [catalogers] are faced with the bar being raised in terms of what they need in response to continue to grow.”

He says mature catalogs such as Lands’ End and L.L. Bean, which are serving a much broader customer segment, are particularly hit by any retail slump and cost increases—more so than a niche title. “The general market catalogs are having to turn to other avenues such as ‘brick and mortar’ to retain their growth.”

Meanwhile, niche titles have been more insulated from the down market. “They’ve actually seen most of the success recently,” Lenser asserts. Their smaller and more focused circulation results in higher response rates and reduces their exposure to expense increases. Also, the Internet probably has helped niche titles more: Followers of a niche can “self-identify as they search their [area of] interest on the Web,” Lenser says.

Four Methods

A second trend that has occurred, says Lenser, is the growing importance of multi-buyers. “Today, catalogers must take a hard look at where their prospect names are coming from. People who’ve bought frequently by catalog are much more likely to buy again.”

Of course, catalogers still must test lists, use modeling and experiment with the cooperative databases, Lenser says. But zeroing in on multi-buyers is a practice that has grown in importance in this competitive market. There are four types of multi-buyers that catalogers can investigate, says Lenser:

1. Multi-buyers between outside lists and your housefile. Housefile names that also appear on outside lists usually produce 30 percent to 40 percent higher response rates and deserve increased contact or reactivation.

2. Traditional multi-buyers—hits between multiple outside lists. Multi-buyers should be tracked separately, list by list. You may find they account for most of the response from any given list.

3. Multi-buyers between outside lists and co-op databases. In effect, the co-ops have modeled your outside lists, and the crossover will respond at a substantially higher rate than names unique to either the co-op segments or outside lists.

4. Strategic multi-buyers. The crossover names between two different types of lists have the characteristics of both lists.

Which Multi-buyers?

For general market catalogs, the first three kinds of multi-buyers are indicative of avid mail-order activity. Lenser states, “If these multi-buyers are segmented and evaluated separately list-by-list, most mailers will see they’re the most profitable names they’re mailing. Conversely, isolating unique names allows circulation reductions in the least profitable names.” Lenser suggests most general market catalogs can reduce their circulation and keep the revenues close to the same as pre-recession levels.

For niche catalogers, the fourth type of multi-buyer can be powerful. “The intersection of two different types of lists can impute a whole new understanding of the names,” says Lenser. “You may merge a list of people who’ve bought pharmacological products for horses by mail order, with another list of subscribers to an English-style riding magazine such as Dressage Today. You now have isolated prospects that are proven mail-order shoppers who [probably] both own a horse and ride English.”

Lenser concludes: “When the bar is raised in a more difficult marketing environment and marketing expenses go up, it becomes critical to know what to cut out.” To do this successfully, use all of the list techniques to create as many segmentations as you can. “The more you can parse a list, the more efficiently you can mail it.”

For more: www.lenser.com or e-mail Lenser at john@lenser.com.