Testing Hidden Markets (1,296 words)
By Malcom Decker
When asked about what color choices would be available in his Model T, Henry Ford said, "You can have any color you want so long as it's black."
Is there such a thing in the United States these days as a single market for any nationally-distributed product or service?
Yet, many mailers treat their markets—that is, the universe of all the lists they think they can mail profitably—as if every person on those lists shared identical characteristics, wants and needs, by mailing the same package to all of them.
Even Reader's Digest, one of the most sophisticated mailers in history, with a peak circulation of more than 17 million, mailed only one control until sweepstakes came along. After that, it mailed two: The second package went to that segment of its universe that never responded to sweepstakes.
Boardroom Reports has tested and had limited success in developing different controls for different segments of its market, according to Boardroom executive vice president Brian Kurtz. He cites additional costs and complexity of execution but sees the main problem for most mailers as a reliable method of segmenting the market.
Dave Shepard, president of David Shepard Associates, a database marketing organization, says that determining whether or not a market includes two or more segments is a manageable project, but adds that it is not likely that every market has two or more significant segments. He emphasizes "significant."
Meanwhile, The Wall Street Journal continues its long-established practice of mailing several different controls, each aimed at a different segment of its multi-faceted corporate/financial/investment market, and testing each of these controls in each segment regularly.
Are you still offering a black Model T? That is, do you have just one control package?
You may have conducted research, followed by live tests, that tells you that your market is bell-shaped, and the data prove that it doesn't make sense to mail more than one control. OK.