Remember eyeballs? During the height of the dot-com mania, eyeballs — shorthand for the number of individuals that were drawn to a Web site — was the hot metric.
After some painful experience, the industry has thankfully pulled back from measuring eyeballs. For its next trick, it should consider taking a well-known attribute and actually using it.
That attribute is margin, which oddly enough is rarely mentioned during database marketing seminars. It’s easy to doze off in those discussions – but a trained observer is taught to snap awake at the mention of margin.
Readers may shrug and say margin is part of the "M" of RFM (recency, frequency and monetary) analysis. But in most of the examples I’ve seen M refers to revenue, with margin relegated to net income discussions regarding the whole company, and not for individual products.
A small and unscientific small sample of database designers say margin is rarely requested as a data field. It wouldn’t be a difficult attribute to toss into a database. Anything with an SKU number could have a base margin figure attached to it.
For orders sold at a discount, the total amount saved could be applied proportionately across everything purchased. Margin could even be set up as a calculation field – sales price, less the cost of the product, with pro-rated amount for marketing applied across everything ordered.
List rental data cards from catalogers will often include product categories, or dollar amounts spent. But if I’m evaluating potential prospects, I don’t just want to know what they are buying and how much they are spending. I want to know if they are bottom feeding. The customer who only comes out for post-Christmas clearance sales probably isn’t one I want in my file.
To respond to the opinions in this column, please contact rlevey@primediabusiness.com.
