Dig for Gold in Your Housefile

Tip #5: Build promotion history into your segmentation strategy.

While maintaining promotion history raises the maintenance costs of an outsourced database, the precision of the contact strategy you can develop and the resulting performance gains far outweigh the costs.

Also, having this data available is key to analyzing lifetime customer value. Try capturing promotional velocity as well (i.e., the time between promotions). The ultimate contact strategy pits promotional velocity against order velocity to optimize customer profitability. Generally, catalogers with promotion history available to them can generate long-term gains of 5 percent to 10 percent based on their increased ability to leverage lifetime-value equations and contact strategies across groups of customers.