Successful House File Strategies Ray Morris-Hill Associates 1

Successful House File Strategies Ray Morris-Hill Associates 1

Some Definitions and Assumptions • Your House File is the total universe of names you own • Customers, enquirers, non-buyers, retail names and suppression file • Make sure you are set up to measure response for each segment Ray Morris-Hill Associates 2

Profit from your House File • Determine the profitable segments • Mail those segments where sales/book exceeds the break-even point • Typically these will be buyers up to 3 years old and most recent enquirers Ray Morris-Hill Associates 3

Break-even Sales/Book Example: 20% refunds (r), 55% margin (m), 12% fulfilment costs (f), 60 pence book cost (b) Breakeven = b (m-f) x Breakeven = £ 0. 60 (0. 55 -0. 12) 1. 175 (1 -r) x 1. 175 (1 -0. 20) = £ 2. 05 Sales/Book (tax inclusive) Ray Morris-Hill Associates 4

Increase Profit through Remails • Send the same book with a cover change to the same people • Why does this work? • Expect Sales per Book from Remail to be 50%-70% of the first mailing • Apply this percentage to the first mailing results to determine which segments are profitable to mail Ray Morris-Hill Associates 5

Remail Example • 13 -24 month buyers - £ 6. 00 per book from first mailing • Remail will perform at 60% of drop 1 • Remail forecast is £ 3. 60 per book • This is greater than the breakeven (£ 2. 05) so remail Ray Morris-Hill Associates 6

Maximise remails by segmentation • The very best buyers may warrant a second remail • Typically these will be 0 -6 month buyers and will perform at 50% of the first remail • However, look for older names that are multi buyers and have a high average order value. These may be worth remailing too. Ray Morris-Hill Associates 7

Your buyers are your best names regardless of the offer • 4 catalogues per year x 3 mailings = 12 mailings to your best buyers • In addition include them in Sale offers • This could be another 4 mailings a year • Remember, every time you mail your buyers, you should be making a profit • Maximising your buyer mailings helps to give you scale economies Ray Morris-Hill Associates 8

Don’t give up on those old names! • Enquirers quickly degrade so make sure you mail them while they are still profitable, then treat them like a prospect list • Old buyers can be reactivated with offers • Offer must be strong, remember they have forgotten about you and need a wake-up call Ray Morris-Hill Associates 9

Conclusions • Extract the gold from your house file by: – Remailing buyers once – Remailing best buyers twice – Sending all your offers to your buyers – Converting enquirers into buyers quickly – Reactivating lapsed buyers with offers Ray Morris-Hill Associates 10

Further Information Ray Morris-Hill 3 Bickley Court 12 Southlands Grove Bickley Kent BR 1 2 BZ Telephone/Fax: 020 8464 2545 Email rmh@dial. pipex. com Ray Morris-Hill Associates 11