Even the smallest tweaks in a direct-mail campaign can have significant impact on sales. At Athletic Supply, a 400-employee company in Dallas, vice-president Craig Rosen has made smart mailing his mission. By analyzing the lifetime value of his customers, Rosen was better able to evaluate his leads and allocate marketing dollars for his company's award-winning team-apparel catalog. His conclusions:
List rental isn't always worth it. In 1996, Rosen's house list (buyers in his database) yielded three times the net profit per order compared to the average rented list. So Rosen cut back on the number of lists he rents.
Big spenders are overrated. One of the study's big surprises was that "monetary select" wasn't so important. In the past, when Rosen rented lists, he paid considerably more to get people who had histories of spending $50 or more on items from a single catalog. For Athletic Supply, $50-plus buyers weren't more profitable in the long run than a random selection. Rosen stopped paying the premium -- and saved $20,000 per year.
Print ads generate one-time buyers. "Someone orders an advertised jersey and never buys again," Rosen says. "Meanwhile, I'm mailing to that person 12 times over the next two years." Not anymore. Rosen has dropped magazine ads because they don't yield long-term customers.