Catalog Co-op Prospecting: Print & Digital
Catalog co-op prospecting models have been around for a couple of decades. But if you haven’t considered them in a while, it might be time to take a new look. Most of the big co-ops have diversified and added digital prospecting programs to their list of catalog services.
Who Should Try It?
Your customer acquisition program has started to plateau (or even decrease) while acquisition costs continue to rise. Most of your acquisition budget is spent on PPC and you’ve never tested other acquisition sources. The quality of new customers that are added to the house file is not as good – lower retention, lower frequency or AOV. You’re not alone and it may be time to explore other options and diversify your customer acquisition program.
Ways to Innovate
If your marketing team seeks to be more creative and less complacent, be prepared to test a few programs developed and ready to deploy. Advance preparation is key and ideally, you have multiple ideas queued-up and ready to go.
We compiled a top 33 list of ideas (and counting!) for one of our beverage clients. We recently posted Four Low-Cost Strategies for Acquiring New Customers (click here). Some ideas include sampling your product or service and partnering with a credible brand that can introduce you to their customers.
Six Co-op Programs to Test Now
1. Test traditional co-op prospecting models for your catalog or direct mail print program. If it’s been a while, give them another try to see whether you achieve success this time around. When testing a model, include at least two different models from two different co-ops in the same mailing. If you only test one model and it wasn’t successful, then you won’t know whether another model or another co-op vendor would have generated better results. I often find than within the same co-op, models sometimes produce wildly different performance outcomes.
2. Oracle offers the VISA custom audience program. Based on key variables that match your customer traits, they build a model using aggregated Visa spend data. The transaction-based insights are used to custom-pipe an anonymized audience to Facebook or other social media platforms.
3. Oracle owns AddThis, a leading provider of publisher personalization, audience insight and activation tools that powers 15 million websites. The digital prospecting program can tell If someone reads an article about your category and leverage this information to serve up display ads. It’s similar to retargeting except it’s based on published content.
4. While Wiland is not the only co-op to offer display ads, I like the way they manage their prospecting program. Wiland will analyze your customer data and create digital models. They will set up a control group that only sees PSA’s while the test group gets the actual display ad. Structuring the prospecting program in this manner gives you the ability to compare revenue between test and control, and determine the incremental revenue generated by participating in their program.
5. Abacus (Epsilon) can take your email subscriber list and append a postal address at a fair price. Match rates could be as high as 50% or more. Appending a postal address to an email subscriber (non-buyer) list lets you test whether sending a catalog or other direct mail helps drive incremental sales or increases your conversion rates.
6. All of the co-ops offer reactivation programs. The co-ops will take your inactive customer file and see which ones are still actively shopping in their database. Then they create a scored model of inactive customers who have the highest likelihood of reactivating.
Although this technically isn’t considered “prospecting”, it is a very useful prospecting tool for those in a niche catalog business – such as hobbies or kids apparel. If you sell golf merchandise, did your customers stop buying from you because they no longer play golf or did they switch to a competitor?
Many catalogers stop mailing these segments after a period of inactivity because they simply don’t know the reason why the customers stopped buying and from a financial perspective, it doesn’t make sense to throw away dollars on an unresponsive segment. Co-ops can help you reach your inactive customers who are most likely to reactivate.
Contact us today if you’re interested in testing one of the co-op programs listed above. We’ve worked with all of the major co-ops and can advise you on which ones might be the best fit for your company.
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