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Catalogue Circulation Planning & Finance Ray Morris-Hill Ray Morris-Hill Associates.

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Presentation on theme: "Catalogue Circulation Planning & Finance Ray Morris-Hill Ray Morris-Hill Associates."— Presentation transcript:

1 Catalogue Circulation Planning & Finance Ray Morris-Hill Ray Morris-Hill Associates

2 2 How do we plan a circulation? Start with your database Maximise the profitable mailings to house file Determine the available recruitment activity and the likely costs of recruiting buyers Mail prospects to the point of acceptable cost per buyer

3 Ray Morris-Hill Associates3 Simple Database Segmentation Buyers versus Enquirers Recency: 0-6 months, 7-12 months, 13-18 months etc Frequency: 1, 2, 3+ Monetary: 0-£50, £50-£100, £100+

4 Ray Morris-Hill Associates4 Database Example - Buyers

5 Ray Morris-Hill Associates5 Buyer Circulation - Example Mail all our buyers in first drop - 22,732 Remail all buyers in second drop - 22,732 Remail best buyers in third drop - 10,000 Mail hot line buyers in drops 2 and 3 - TBD We expect all these buyer mailings to be profitable

6 Ray Morris-Hill Associates6 Database Example - Enquirers 0-6 month enquirers – 6,523 7-12 month enquirers – 4,542 13-18 month enquirers – 3,754

7 Ray Morris-Hill Associates7 Enquirer Circulation - Example Mail all Enquirers in Drop 1 - 14,819 Mail 0-6 month Enquirers in Drop 2 - 6,523 We expect all these enquirer mailings to be profitable

8 Ray Morris-Hill Associates8 Prospect Circulation Only time to consider lists here Rank list history by the profit or loss of acquiring a new buyer Determine cut-off point by pay back criteria Maximise roll-out to successful lists remembering statistical variation in results

9 Ray Morris-Hill Associates9 Payback Criteria What is an acceptable cost of acquiring a buyer? Depends on propensity to buy again and the profit from those future orders If I recruit 1,000 new buyers today and mail them my catalogue programme, how much profit will I make over the next 6 months?

10 Ray Morris-Hill Associates10 Sample Answer to Payback Question assuming 3 mailings in next 6 months Mail Spring Catalogue Drop 11000 @ £15.00/book Demand £15,000 Profit £5,000 Catalogue Costs (£500) Net Profit £4,500 Mail Spring Catalogue Drop 21000 @ £9.00/book Demand £9,000 Profit £3,000 Catalogue Costs (£500) Net Profit £2,500 Mail Spring Catalogue Drop 31000 @ £4.50/book Demand £4,500 Profit £1,500 Catalogue Costs (£500) Net Profit £1,000 Total Profit in next 6 months from 1,000 buyers is £8,000 - £8 per buyer If it cost more than £8 per buyer to recruit, payback will be longer than 6 months

11 Ray Morris-Hill Associates11 Prospect Circulation Example List PLANB Action Quantity A – 0-12+£3 Mail all available on same select 30,000 B – 0-12-£4 Mail all available on same select 25,000 C – 0-12-£8 Consider tighter select 10,000 D – 0-12-£12 Consider re-test with tighter select 6,000 E – 0-12-£20 Drop - A – 13-24Not tested Test extension 6,000 F - 0-12Not tested Test 6,000

12 Ray Morris-Hill Associates12

13 Ray Morris-Hill Associates13 Summary Start with your own database Maximise profitable buyer mailings Maximise profitable/acceptable enquirer mailings Evaluate acceptable loss per new buyer Rank lists by profit/loss of acquiring a new buyer Mail prospects down to acceptable loss

14 Ray Morris-Hill Associates14 Further Information Ray Morris-Hill 3 Bickley Court 12 Southlands Grove Bickley Kent BR1 2BZ Telephone/Fax: 020 8464 2545 Email rmh@dial.pipex.com


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