Strategy: More on Multichannel Matchbacks

Matchbacks are a way of life for catalogers today. This process of having your order file “matched back” against your recent mail tapes to give credit to the proper source or key code on a list-by-list, segment-by-segment basis has become fairly routine. They’re the only way to tell where customers are coming from and which source key codes should be given credit for the sale. Without matchbacks, it’s not uncommon to trace only 30 percent to 40 percent of your orders to a specific key code.

But the matchback process is hardly a perfect science. There are issues with date ranges, the logic used, timing, multiple catalog titles and more. So this month, let’s get up-to-date on matchbacks and how you can improve your process.

How They’re Done
The process matches back orders to mailings using merge/purge logic. It allocates unknown orders back to mailed records based on customer-provided source codes, customer numbers, merge/purge results, catalog in-home dates and order dates. The summary report includes source or key codes, total catalogs mailed, total orders, total dollars, average order sizes, and dollars per book.

To perform a matchback, you typically need specific data on the following:

• mail files from the appropriate time frame;

• a listing of all valid source or key codes, such as print mailings, e-mail campaigns, affiliate marketing, bouncebacks, catalog request (inquiry) mailings and others; and

• order header records for the appropriate time frame — desired fields include name/address, customer number, source code, order date and order amount.

There are more records that can’t be matched to a mail file due to increases in search and affiliate Web marketing. Buyers from these channels tend not to be good catalog buyers. Therefore, catalogers often reduce the number of catalogs they mail to these buyers. Catalogers also often eliminate mailings to one-time Internet buyers. Unlike typical catalog shoppers, these consumers tend to be item purchasers.

This puts a premium on matchback programs that not only provide response reports, but also identify those customers who respond to catalog mailings and come from nonmailed sources or offers.

Those responding to catalogs then can be put on contact strategies appropriate for catalog responders, while the nonmatches are sent fewer, if any, catalogs. To accomplish this, the information must be returned to the file so when you “pull” customer records for a mailing, you can tell the difference between pure Web buyers and catalog-driven Web buyers.

On average, 40 percent of business coming through — not from — the Internet can’t be traced to a specific source code. In addition, there’s another 20 percent miscellaneous, untraceable factor. This means approximately 60 percent of your orders can’t be tracked to a specific source or key code.

Often, lists are made up of heavier Web buyers that may look like they don’t work well prior to a matchback when they’re actually profitable. Without a matchback, you’d never know this, and any testing would be wasted. You could feel it’s difficult to find prospect lists that work, when in actuality you’ve already found good lists to add to your list continuations.

On the other hand, you might have lists that look like they’re falling off, or your total rentals look like they’re trending downward. This could just be a result of heavier Web sales. It sounds simple, but without knowing the level of performance of all segments mailed, you could be led to some false conclusions that will influence your marketing strategy and other decisions. A matchback will keep you on track and give you confidence in the results needed to make sound circulation judgments.

Co-mailing (offline) is another recent development that contributes to the untraceable factor and the need for matchbacks. This is the process of co-mingling catalogs with other catalogs to qualify for more mailing discounts. With offline co-mailing, only the back cover can be ink-jetted with the name, address and source code. The order form inside the catalog cannot be ink-jetted. So you lose the ability to trace the order if faxed, mailed or called in.

How frequently you should run a matchback depends on how often you mail and how you apply the data to your marketing/circulation strategy. A matchback should be done two, three or four times a year depending on your degree of seasonality. For example, if your business is based on a fall/holiday season followed by a spring season, doing matchbacks twice a year is probably adequate.

Some firms offer the ability to matchback weekly. It’s nice to matchback often, but probably not cost-justified. Doing matchbacks with the same service bureau that handles your merge/purge work is most common, since it already has your mail tapes.

Typical Results
In the example on pg. 25, the matchback attributed 35 percent of Web and unknown demand back to a specific mailing. A total of $1,075,769 of gross demand revenue was credited to a specific source code, and 62 percent of the total was allocated back to the housefile. This reinforces the fact that the catalog is the largest driver of traffic to the Web, with most of the business going to the Web coming from your own customers. Approximately 17 percent of the untraceable sales were matched back each to cooperative databases and outside rented lists.

Remails of the same catalog with different covers will affect your matchback results — the matchbacks will be allocated to the most recent mailing. If your business is highly seasonal, this skews results to the last mailing. Compensate by adding the results of the initial mailing and the remails together to spread the results more accurately across all these drops. When it finds a match, the program will match to the most recent mail date. If it doesn’t match that mail date, it goes back to an earlier drop, and so forth.

The cost to do a matchback is in the range of $2.50 per thousand. The base price often decreases if the matchback is done as part of a housefile update. The number of books circulated also can affect the base price quoted by your service bureau. Subscription prices that provide the ability to matchback online weekly range from $2,000 to $4,000 and up. This option is more expensive and more time-consuming to manage for mailers.

Key Issues
1. Fairly allocating the Internet portion is difficult. If customers buy product from the Internet, they become Internet buyers. They’ll receive a catalog in the mail. If they make a second purchase from the Internet, when a matchback is done, they’ll always be considered catalog buyers after their initial purchase because they were mailed a catalog with a housefile key code identifier.

While the catalog remains the largest driver of traffic to the Web, this does make it difficult for Internet marketing managers to verify that they’re growing their businesses and remaining on budget since, in this case, the credit is going to the catalog. This factor will impact the repurchase stats for the Internet.

2. Date ranges are important to accurate matchback reporting. How many months should you matchback, for example? This varies by how often you mail and how much business is driven by the Web. The problem always occurs in the last catalog mailed during the holiday season because the matchback will favor this mailing. I don’t favor making any assumption for the allocation of this factor because it means introducing yet another unknown. Any allocation at this point isn’t necessary because what really matters is the performance of the housefile buyers by segment for all mailings combined. Any analysis from names mailed more than once — i.e., remails — should be evaluated in total across all mailings and not necessarily by individual drop or mailing.

3. Source code tracking is as important as it was 40 years ago. The fact that matchbacks are done on the back end of a mailing doesn’t minimize the importance of capturing source codes on the front end when possible. Continue to capture source codes and use a matchback to help allocate orders through the Web and miscellaneous untraceable results.

Conclusion
Recognize matchback methodology isn’t perfect. Certain assumptions must be made, and it’s not always black or white. However, tracing orders and sales to a specific source or key code is critical to arriving at proper
conclusions and making the best decision regarding future circulation plans.

Stephen R. Lett is president of Lett Direct. He’s the author of “Strategic Catalog Marketing,” published by Catalog Success. You can reach him at (302) 539-7257 or online at steve@lettdirect.com.