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Catalogue Circulation Planning & Finance. Ray Morris-Hill Ray Morris-Hill Associates. How do we plan a circulation?. Start with your database Maximise the profitable mailings to house file Determine the available recruitment activity and the likely costs of recruiting buyers

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Catalogue circulation planning finance

Catalogue Circulation Planning & Finance

Ray Morris-Hill

Ray Morris-Hill Associates


How do we plan a circulation
How do we plan a circulation?

  • Start with your database

  • Maximise the profitable mailings to house file

  • Determine the available recruitment activity and the likely costs of recruiting buyers

  • Mail prospects to the point of acceptable cost per buyer

Ray Morris-Hill Associates


Simple database segmentation
Simple Database Segmentation

  • Buyers versus Enquirers

  • Recency: 0-6 months, 7-12 months, 13-18 months etc

  • Frequency: 1, 2, 3+

  • Monetary: 0-£50, £50-£100, £100+

Ray Morris-Hill Associates


Database example buyers
Database Example - Buyers

Ray Morris-Hill Associates


Buyer circulation example
Buyer Circulation - Example

  • Mail all our buyers in first drop - 22,732

  • Remail all buyers in second drop - 22,732

  • Remail best buyers in third drop - 10,000

  • Mail hot line buyers in drops 2 and 3 - TBD

  • We expect all these buyer mailings to be profitable

Ray Morris-Hill Associates


Database example enquirers
Database Example - Enquirers

  • 0-6 month enquirers – 6,523

  • 7-12 month enquirers – 4,542

  • 13-18 month enquirers – 3,754

Ray Morris-Hill Associates


Enquirer circulation example
Enquirer Circulation - Example

  • Mail all Enquirers in Drop 1 - 14,819

  • Mail 0-6 month Enquirers in Drop 2 - 6,523

  • We expect all these enquirer mailings to be profitable

Ray Morris-Hill Associates


Prospect circulation
Prospect Circulation

  • Only time to consider lists here

  • Rank list history by the profit or loss of acquiring a new buyer

  • Determine cut-off point by pay back criteria

  • Maximise roll-out to successful lists remembering statistical variation in results

Ray Morris-Hill Associates


Payback criteria
Payback Criteria

  • What is an acceptable cost of acquiring a buyer?

  • Depends on propensity to buy again and the profit from those future orders

  • If I recruit 1,000 new buyers today and mail them my catalogue programme, how much profit will I make over the next 6 months?

Ray Morris-Hill Associates


Sample answer to payback question assuming 3 mailings in next 6 months
Sample Answer to Payback Question assuming 3 mailings in next 6 months

Mail Spring Catalogue Drop 1 1000 @ £15.00/book Demand £15,000

Profit £5,000

Catalogue Costs (£500)

Net Profit £4,500

Mail Spring Catalogue Drop 2 1000 @ £9.00/book Demand £9,000

Profit £3,000

Catalogue Costs (£500)

Net Profit £2,500

Mail Spring Catalogue Drop 3 1000 @ £4.50/book Demand £4,500

Profit £1,500

Catalogue Costs (£500)

Net Profit £1,000

Total Profit in next 6 months from 1,000 buyers is £8,000 - £8 per buyer

If it cost more than £8 per buyer to recruit, payback will be longer than 6 months

Ray Morris-Hill Associates


Prospect circulation example
Prospect Circulation Example next 6 months

Ray Morris-Hill Associates



Summary
Summary next 6 months

  • Start with your own database

  • Maximise profitable buyer mailings

  • Maximise profitable/acceptable enquirer mailings

  • Evaluate acceptable loss per new buyer

  • Rank lists by profit/loss of acquiring a new buyer

  • Mail prospects down to acceptable loss

Ray Morris-Hill Associates


Further information
Further Information next 6 months

Ray Morris-Hill

3 Bickley Court

12 Southlands Grove

Bickley Kent BR1 2BZ

Telephone/Fax: 020 8464 2545

Email [email protected]

Ray Morris-Hill Associates


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