That was the start of a relationship that spanned at least 10 years of circulation management and some 4 or 5 ownership changes (perhaps the greatest challenge in spinning straw is a new King).
In that first mailing, we were going against their internal RFM scoring system. The graph below shows the difference in profit per piece in a later test mailing. What good modeling can do is move marginal names up or down, yielding a steeper slope... which makes it easier to know how deep to mail.
We also developed many different ways to score what most would call the same variable. One benefit was that we quickly 'saw' some amazing customers at the high end of the spectrum.
“Have you ever thought about making business-2-business calls to some of you big customers?”
“No, we're strictly a consumer catalog.”
“Who buys these $4,000 pitching machines?” I asked.
“Leagues, stadiums, batting cages, colleges and even some major league teams.”
“And you don't think those are businesses?”
To make a long story short, BaseBall Express created an outbound call center and even hired a few salesmen to go out and talk with their large accounts. We created a separate set of variables (we call it a 'dimension') to look for possible business clients. Interestingly, we found that a customer who bought line chalk or rosin bags was a good candidate... even though those are very inexpensive products – even compared with a good bat or glove. But it clearly indicates they own a baseball field. It is another excellent example of business growth through a better understanding of the customer (through modeling).
While we were there, BaseBall Express acquired a softball catalog. It had quite a different look and positioning, very down scale. To help improve performance, we created another set of variables, to look at softball customers differently. We took softball association membership lists and created softball density per ZIP and SCF population. We found that there were softball 'hotspots' across the country. When deciding who next to mail in relatively inactive customer segments, the hot geographies had considerable power.
Capitalizing on that success, we decided to launch a fast pitch catalog, targeting female athletes. We used a similar multi-step process (outlined earlier in the book) to insure that we would be targeting the right customers. We began by creating a female product dimension – BaseBall Express had been selling a few products (Ie. pink batting helmets with a hole for your pony tale) which enabled us to build upon. It was important that we identify the girls, but also preserve the traditional male softball market.
The girls were used to buying from a catalog with a burly fireman on the cover... but we weren't sure the men would be interested in buying from a girls book. Consequently, we were very conservative about who we identified as female. If in doubt, they simply continued to receive the main softball book. When the catalog launched the results were excellent as expected.
“The system spotted opportunities in the institutional market. We saw great differences between Softball Sales and Baseball Express geodemographics. MMI Has been handling our main mailings for the past 8 years. We’ve grown to almost 6 times larger. Our first mailing with MMI generated response rates almost twice as high as we’d seen with our home built circulation system. It has been a pleasure working with the professionals at Miglautsch Marketing.”