The When Factor (1,065 words)
by Jack Schmid
Imagine, if you will, that a family is thinking about purchasing a new computer. How valuable would it be for a catalog marketer like Dell, Gateway or Compaq to know this information? What if every cataloger could know the time when a prospective customer is ready to purchase a product?
There is little doubt that we could see double, triple or 10 times normal response rates if we could use the "when" factor.
Catalogers are generally lucky just to know the "who" information that is in their customer database, relying on RFMP (recency, frequency, monetary and product category) information from previous purchase history.
In getting repeat sales, perhaps the most valuable individual factor of the ones listed above is the P or product category. For instance, business catalog customers who buy from certain product categories tend to buy from that category again.
Consumer catalogers find a similar correlation in using product purchase history for projecting future customer purchases. Use of consumable-products or gift catalogs is highly predictive of future buying activity. This purchase history helps forecast what customers will continue to buy.
The "why" factor is a difficult one to determine and has always been the challenge of researchers and direct marketing experts. They chastise catalogers and direct mailers, saying that they only know what customers buy and seldom why they buy from a particular catalog.
A Question from Lester Wunderman
The first time I heard the "when" question raised was a number of years ago in a talk by direct marketing guru Lester Wunderman. He was accepting one of the numerous awards he has received from the Direct Marketing Club of Washington, D.C. The example he cited was a durable goods purchase—an automobile. If auto dealers or major car companies knew when a family was about to purchase a new vehicle, they could build a smashing direct marketing campaign (a series of communications) perfectly timed to take advantage of the knowledge of an upcoming purchase.