The Drill Down

Typical Objectives

Next, let’s look at typical objectives of direct marketers in applying statistical analyses and modeling to their operations and marketing efforts. Requirements for campaign forecasts include:

- allocation of all unknown demand, orders and units from each channel to the appropriate campaign (i.e., non-source-code items from phone and Web);
- forecasts for response percent, number of orders, number of units, total demand, average order dollars and sales per thousand catalogs by source code, customer segment, channel, and totals on a week-by-week and day-by-day level (factored for circulation — you wouldn’t mail all names in each cell);
- forecasts allocated by channel;
- pre-season forecasts of aggregate demand (and percent-complete) on a week-by-week basis, showing forecasts weekly and cumulative orders and dollars, with the ability to drill down to the book, key code, source code or product level;
- revised forecasts mid-season;
- response rate analysis accounting for responses by customers vs. prospects;
- forecasts and other metrics by customer segment, channel and totals compared to budget and prior year effort/results;
- forecasts that should include projected return and cancellation rates; and
- financial forecasts of net margin and profit and loss (projected vs. actual), which should incorporate data on fixed, promotional and fulfillment costs.