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| MARKETSMITH NEWS |
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| NAVIGATING OVERCHARTED WATERS - TO CO-OP OR NOT TO CO-OP |
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While co-ops have been around for almost 20 years, we are still looking for the magic keys to use them to best advantage. Marketsmith Executive Vice President Susan Pizzano provided insight and recommendations to demystify the process of working with co-ops, to make sure mailers gain the greatest benefit from taking co-op names in her presentation, Navigating Overcharted Waters - To Co-op or Not to Co-op, at the ACCM conference this Spring to rave reviews.
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| Below is an excerpt from the white paper we have created from the presentation. |
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| Working hand in glove with your co-op account rep is critical to making sure you have the best service and that you generate optimal results. Here are six rules for interaction with your Account Rep at each co-op. These recommendations are focused on consumer co-op databases. |
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| 1) | Make sure you and your rep share information. You want to have an overview and understanding of who is in the base and how the co-op categorizes products. You want your rep to understand your business, its seasonal variations, creative strategies, customer demographics and psychographics. Explain how your data are organized; since the co-ops have to put your information into their pre-defined product categories. Also, have the reps explain to you how they would define the product categories in your market. The more the rep understands your business, the better service you can expect. |
| 2) | Understand the modeling process. Confirm with the rep what the co-op is modeling off of your house buyer file. Review if recent changes in your buyer file may warrant changing your House modeling pool of "best buyers." Usually the same season from prior year is used in modeling. That may not be best if that mailing creative will be different or if results overall for the mailing were weak. Identify house segments which may not have performed well and eliminate those. Consider expanding or emulating a different season that is better. |
| 3) | Review model changes regularly. E.g. has a recent change of participants affected the modeling pool.? Has one of your synergic catalog mailers has left the base? |
| 4) | Test changes to the model's frequency or average order assumptions to lift response. E.g. previous model included $50+ buyers; test raising it to $75+. |
| 5) | Track ranking results separately by flagging names that were mailed in a prior mailing "previous tagged use" versus "new names for this mailing." This is similar to the "omitting prior usage" concept; however, we have observed that the results change by model and co-op vendor. Track it separately to pick the better performing piece where necessary. |
| 6) | When supplying names, determine if your competitors should be blocked. If you do so, the competitor cannot get your names into their models. However, the reciprocal is also true - you can not get their names in your models. This can affect your model performance. And reevaluate competitor relationships at least two times a year, reviewing if there are new entrants in your selling space that should be added to the block list. In this way you can stop a smaller mailer from building its business off your mature buyer file. |
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| The white paper will take you through the specific process used for one client, as an example. And it will provide you with some insights and ways to engage co-ops that you may not have considered. If you would like a copy of the paper, please email us at: wholland@marketsmithinc.com |
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