Holiday Planning – One Year Revisited

It can often be difficult to identify topics to write on, when you are a constant contributor through blogs or newsletters. So when the time came to put down my thoughts, I pulled up some of my prior musings to see if I could find any inspiration. What made a direct hit in my mind was the posting from almost a year ago to the day: http://cohereone.com/start-planning-now-for-a-successful-holiday-season/

This was timely and appropriate, since most of us are starting to gear up for the holiday, even though summer hasn’t started yet (especially here in the Pacific Northwest.) What struck me the most was the shift of focus on testing away from mailing more to how to improve mail productivity or even reduce volume during the holiday. Many clients still have the desire to increase postal reach and frequency, but recently more seem to be in the position of wanting to remain flat or decrease contacts and still maintain or grow sales.

We at CohereOne are fortunate to have the opportunity to work with a variety of clients who are in different company life stages, have different goals, have varying marketing channel opportunities and sell in different industries. Because of this mix we are exposed to many situations, some good and some bad, but from each we can learn.

The one constant we have observed over and over is that there needs to be a plan in place to account for the change in demand when one marketing promotion is changed. If postal reach is to be reduced, then there has to be a plan in place to recoup the lost demand through another marketing channel, i.e. redistribute budget to digital. The kiss of death (we’ve seen it many times) is pulling back on one promotional channel and not adjusting elsewhere, expecting that the demand will continue to come in at the same rate. This is where planning and testing plays an important role, in order to be prepared and to set the company up for future success.

One of the tactics that has succeeded for some clients is combining online and offline marketing together to help boost the performance of each. With the advances in digital marketing being able to identify consumers, we are now able to saturate audiences with marketing messages, both online and offline. An example of this would be importing an individual mail file into Facebook to create custom audiences that would run at the same time as a print mailing. Another example would be to take the same mail file and create a targeted ad display campaign that would run during the same time as the printed campaign. What we have observed with this strategy is an overall increase in productivity for each promotional channel. For instance the sum of a coordinated Facebook campaign and a catalog mailing is greater than if each were run independent of each other.

Another practice that we have been testing and implementing is the reduction of marginal postal segments and/or prospects and reallocating the marketing budget to digital sources that may be more productive immediately. For some we are seeing, through testing, that we are able to get a more immediate return through digital advertising, which is sufficient to overcome the downstream effect of a lower LTV.

Example: An SEM Non Brand term can gain a new customer at a $10 contribution, with a $50 twelve month value. At the same time a catalog acquired customer would have a $15 loss, with a $65 twelve month value. At the end of twelve months the SEM customer would be worth $60 and the catalog customer would be worth $50. 

Clearly it would be appropriate to reduce the catalog and increase the SEM in this situation. But a close eye would need to be kept on both, in order to find the sweet spot.

As the SEM spend is increased the overall performance will start to decrease since you are forced to go to more marginal terms. The same applies to the catalog, where overall performance should increase by cutting out the lowest performing names.

These are just a couple of recent examples of what we are currently planning and implementing. The key to success is to have a solid plan crafted with adequate tests and proper expectations set, rather than going full bore without testing and expect business not to implode. Set yourself up for success and not the “kiss of death”?

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