E-Mail Marketing, Search, Matchback, Attribution

One of the mysteries of marketing in 2009 is the concept of attribution, a process where we matchback orders derived in one micro-channel to the advertising micro-channel that drove the order.

For whatever reason, the e-mail blogosphere and vendor community fails to capitalize on this opportunity.

My Mutichannel Forensics projects repeatedly indicate that e-mail marketing and search marketing play a unique micro-channel role. E-Mail marketing is a "love" channel, if you will. The 10% to 50% of your twelve-month buyer file that subscribes to e-mail marketing "loves you" more than the average customer. These customers have better "RFM" characteristics, not because of e-mail marketing necessarily, but because the customer is a good customer who wants to learn more.

And then we have search, which works in the opposite direction. The customer who "loves you" doesn't implicitly trust you. As a result, she wants to make sure that she's getting the best deal possible, the best combination of merchandise and value.

When you have customers who want to see your e-mail campaigns and then want to use search, you have a classic micro-channel combination that must be tabulated in your database, and analyzed going forward.

At minimum, we need to run matchback algorithms for e-mail marketing. Catalogers have been running matchbacks for the past fifteen years, taking credit for orders that were not necessarily driven by catalogs. E-Mail marketers, however, have been exceptionally slow to embrace attribution and matchback programs. I don't understand why.

It's a fairly simple process. Say you deliver an e-mail marketing campaign on a Tuesday. Take all customers who ordered on Tuesday, Wednesday, Thursday, and Friday, and match them back to your e-mail campaign. And by the way, make sure you have a holdout group, a group who did not receive the e-mail campaign, and do the same process --- subtracting the difference between mailed and holdout group for true incremental value.

Now, any orders that are generated by search marketing are matched back and attributed to the e-mail marketing campaign. And here's where we need to make an adjustment ... we need to make a guess at all of the unconverted searches that were caused by e-mail marketing, and allocate the cost of those unconverted searches back to the e-mail marketing campaign. If the typical search conversion rate is, say, 3%, you have to multiply converted searches by 33, and then multiply that total by the cost-per-click, in order to get at the right advertising cost.

Two things usually happen, two things that are highly relevant to e-mail marketers.

1. E-Mail marketing causes search activity, and that search activity results in orders that are normally credited to search and should be credited to e-mail. This can result in e-mail marketing being more productive that usually measured to be.
2. E-Mail marketing causes the "search audience" to do a bunch of unproductive searches. As a result, the "search segment" is actually unprofitable --- causing the e-mail marketer to withhold e-mail marketing campaigns to customers who search all of the time.

The latter point is worth noting ... the e-mail marketer should be creating segments in the database of customers who utilize search on a frequent basis ... electing to develop a different contact strategy for the "E-Mail / Search" micro-channel combination.

E-Mail Customers: They Can Be Valuable!

Part of any Multichannel Forensics project is an assessment of the value of e-mail subscribers.

Now this isn't some sort of qualitative "Brand 'X' uses great subject lines" or "E-Mail is a wonderful one-to-one relationship vehicle" analysis. Nope, we're actually controlling for key factors, understanding when all factors are equal if e-mail can carry the freight.

And it turns out that the fact a customer is an e-mail subscriber is important.

You'll see something like this:

• Logistic Regression Of 12-Month Repurchase Rates = -2.000 - 0.5*(months since last purchase ^ 0.5) + 0.8*(number of orders) + 0.3*(email subscriber).

• Spend Model = 120 + 0.30*(historical spend) + 4*(email subscriber).
  

So let's compare two "equal" customers, one an e-mail subscriber, one not. Each customer has a recency of 8 months, three orders, and $300 of historical spend. The first customer is an e-mail subscriber, the second customer is not an e-mail subscriber.

• Customer #1: Response = 32.9%, Spend = $214, Value = $70.34.
• Customer #2: Response = 26.6%, Spend = $210, Value = $55.89.

With two equal customers, e-mail is projected to deliver $14.45 of incremental sales in the next twelve months.

Your job is to compare this metric to the data you get via open rates and click through rates and conversion rates. Do you see a difference?

For instance, your forecasts might suggest that Customer #1 will generate $0.15 per e-mail, across 52 annual e-mail campaigns. If true, then you're forecasting this customer to generate $7.80 over the next twelve months.

In other words, the modeling procedure shows you that e-mail marketing is nearly twice as valuable as your traditional marketing metrics suggest. Complement this data with actual mail/holdout results, and you might really have something!

The important thing, of course, is to put your e-mail program through a full Multichannel Forensics analysis, thoroughly understanding the role e-mail plays in growing each channel.

E-Mail Marketing: At An Inflection Point

This week, I read a blog post where an e-mail marketing proponent was relaying a Twitter conversation with others on the blog, in chronological order. One might think that the e-mail community might use e-mail for communication instead of Twitter, if e-mail is as valuable as we're told.

Today, I visited the homepage of a very popular e-mail marketing service. On the homepage alone, there are four references to blog posts, one to subscribe to a podcast, one to download a white paper, one to a message board, one to press releases, one to "resources", two opportunities to subscribe to content via RSS, and one to subscribe via e-mail.

Wouldn't it make sense for the e-mail marketing vendor to create a double-opt-in, permission-based list of eager B2B subscribers who love to learn about e-mail marketing? Why defer to RSS?

E-Mail marketing is at a major inflection point. The micro-channel is being seriously cannibalized by social media. Seriously cannibalized. Conversations have moved from e-mail to Twitter and Facebook.

And when conversations move, marketers follow.

E-Mail vendors might blame e-mail marketers for any perceived failures in e-mail marketing. And that's probably a fair assessment. Here is every subject line from every e-mail marketing message I received from one brand in just the past twenty-three days.

• Free Shipping Ends Today.
  
• 25% Off And Free Shipping.
• 25% Off Ends At Midnight.
• Free Shipping And $10 Off.
• Free Shipping And $10 Off.
• $10 Off And Free Shipping.
• Today Only, 25% Off And Free Shipping.
• Last Day For Free Shipping.
• Today Only, 20% Off.
• Free Shipping On Everything.
• Free Shipping, No Minimum.
• Free Shipping On Everything.
• 20% Off Sitewide, One Day Only.
• Free Shipping, One More Day.
• Last Day, Free Shipping.
• First Time Ever, Save 30%.
• 30% Off, Exceptional Savings.
• 30% Off Sitewide.
• 30% Off, Three Days Left.
• Reminder, 30% Off.
• Ends Today, 30% Off.
• 6 Hours Left, 30% Off.
• Free Shipping On Everything.
• Free Shipping On Everything.

Honestly, there's nothing wrong with that strategy, especially if your target customer is a discount/promo loving brand advocate who signed up for a daily promo-based message.

But we are at a serious inflection point. E-mail is going to be one of a very small number of ways that a marketer can push a permission-based message to a customer ... so for marketers, this is an incredibly valuable tool. It just seems like something is going to change, and our industry is going to need some leadership to navigate the discount/promo side of e-mail marketing and the serious cannibalization that is happening due to social media. I wish I had the answers, I don't. All I know is that my Multichannel Forensics work indicates that e-mail marketing has significant value as a bridge between older channels and emerging channels, so I care about the craft of e-mail marketing.

Paid Search And Catalogs

So many of my Multichannel Forensics projects now include both referring URL information and catalog / e-mail promotional history.

When you have this type of information, you quickly notice that customers blend advertising strategies into a slurry of confusion that results in the same purchase the customer used to place with you fifteen years ago.

This caused our industry to dive head first into matchback analytics. We try so hard to allocate every order that happened in the past.

It might be time to view the future.

In other words, we can measure past relationships, modeling them to see what a customer might do in the future.

For instance, I notice that some customers use paid search and catalogs as a combined effort, then use paid search and e-mail as a combined effort, then use paid search, then simply purchase without the benefit of any advertising.

Identify these customers, mail fewer catalogs to them, and focus ad spend on customers who require various forms of marketing to place orders.

Best Answer: E-Mail Analytics Challenge

One hundred twenty one of you attempted The MineThatData E-Mail Analytics And Data Mining Challenge. Kudos to all who investigated a potential solution! If you want to try a solution, download the dataset here.

No solutions were submitted from the e-mail blogging community, or the e-mail vendor community. Considering that a quarter of our audience represents the e-mail marketing community (including readers from all major US-based e-mail marketing vendors), I was disappointed that thought leadership failed to emerge from this audience.

The winning solution from the academic and data mining community was submitted by Nicolas Radcliffe of Stochastic Solutions. Mr. Radcliffe also hosts a blog, discussing the advantages of his methodology, called Uplift Modeling.

His paper is titled, "Hillstrom's MineThatData Email Analytics Challenge: An Approach Using Uplift Modeling".

A copy of "Hillstrom's Multichannel Forensics" will be sent to Mr. Radcliffe. Congrats to Mr. Radcliffe on his winning entry!

Cross-Marketing E-Mail (And Catalog) Lists

Last fall, I requested information about a Recreational Vehicle.

Within two weeks, I started to receive numerous e-mail campaigns from various organizations loosely aligned with the Recreational Vehicle industry. A campground in New Mexico offered a discount if I stayed with them during a regional festival. A finance organization offered a low introductory rate if I purchased a vehicle in the next thirty days.

As a consumer, this was frustrating. I didn't appreciate appearing on a veritable plethora of e-mail lists, lists that I lhad to unsubscribe to on an individual, case-by-case basis.

It is easy to empathize with the bloggers, vendors, third parties, and customers who continually ask brands to discontinue the practice of cross-marketing e-mail and catalog marketing lists, a practice that results in a ton of ill will and marketing waste.

Now sit in the shoes of the e-mail marketing manager for a moment. Pretend that the e-mail marketing manager at J. Jill wants to use the "sister file" at Talbots (Talbots owns J. Jill) to promote J. Jill merchandise. The e-mail marketing manager blasts a campaign to 100,000 Talbots customers who have never purchased from J. Jill. A week later, the results are tabulated, and are illustrated below:

E-Mail List Size	100000
Opt-Out Rate	20.0%
Remaining Candidates	80000
Open Rate	18.0%
Engaged Candidates	14400
Click-Through Rate	6.0%
Potential Purchasers	864
Conversion Rate	5.0%
Number of Purchasers	43
Average Order Value	$137
Total Demand	$5,918
Flow-Through To Profit Rate	38.0%
Marketing Contribution	$2,249
Advertising Cost	$250
Variable Operating Profit	$1,999
Demand Per E-Mail Delivered	$0.06

So let's review the challenge, through the eyes of the e-mail marketing manager.

• Her practice of cross-marketing e-mail lists is acceptable, as outlined in the small print, the legal-speak, of the privacy policy of her brand.

• The e-mail marketing manager gets to keep her job if she grows the sales of the brand she manages. In fact, she earns a nice bonus, maybe 15% of her annual salary, if she adds "x" new customers, above and beyond the number of new customers from the prior year.

• Given her incentive structure, the e-mail marketing manager executes an easy strategy. Instead of doing the hard work of finding customers truly interested in her brand, she cross-markets her brand to a "sister file".

• She angers 20% of the folks who receive the message, a shocking percentage by any account. These folks opt-out of further e-mail marketing of her brand.
  

• Yet, 43 customers out of the original 100,000 choose to purchase merchandise, spending a total of $5,918, generating $1,999 profit.

Any rational individual would consider this marketing campaign a colossal failure. Only 43 out of 100,000 customers chose to purchase something, while 20,000 customers were so angry that they opted-out of future campaigns.

Yet from the standpoint of "the brand", this campaign could be viewed as a marginal success. From the perspective of the brand, there aren't a veritable plethora of profitable ideas out there ... if there were, the brand would already be executing them!

This campaign generated profit. This campaign gets our e-mail marketing manager one step closer to earning a fifteen percent bonus that she will use as a down payment on the purchase of her first home.

Third parties have become increasingly critical of the practices of marketers, and for good reason. Third parties can easily see issues from the standpoint of the customer, and can empathize with the customer.

It isn't as easy to see the world through the eyes of the e-mail marketing manager or catalog marketing manager. Would you be willing to execute politically correct strategies that are likely to be money losers (in the short term), costing you the bonus payout that funds the down payment on your first home purchase?

Until you sit in the seat of the individual executing these strategies, it is easy to criticize cross-marketing strategies.

In an ideal world, leadership provides an incentive plan that encourages the e-mail marketing manager or catalog marketing manager to create and execute marketing strategies that are consumer friendly.

In this example, if you were the executive in charge of e-mail marketing, what type of incentive (bonus) plan would you create for the e-mail marketing manager, to encourage her to execute customer friendly strategies that may actually cause a decrease in sales (in the short term)? As an executive, would you be willing to lose your job because you "appeared to side with your customer" by discontinuing cross-marketing practices?

Free Tip: Customer Habits

It probably won't surprise you to learn that you interact with posts that have the word "free" in the title at least three times as much as you interact with ordinary posts, ordinary posts that also offer free information.

We are conditioned to respond to certain words, perceiving that some words are more valuable than others.

Our customers are conditioned to certain behaviors as well. Once the customer gets in a habit, the customer tends to maintain the habit.

Let's look at two examples of customer habits.


Catalog vs. Internet Buyers

I am most often asked by catalog marketers how they can minimize catalog expense while maintaining sales. One way is to simply look at customer habits.

Step 1: Retrieve the channel of the last four purchases placed by your customers. Categorize each purchase by channel.

Step 2: Measure the percentage of customers who purchased via the internet or catalog channel in their most recent purchase as a function of the channel used in the past three purchases. You are likely to see several patterns:

• Customers who placed their last three purchases via the phone/mail channel probably have a 90% chance of placing their next order via the phone/mail channel. Guess what? These customers need catalogs. This works for both you and your customer. You love mailing catalogs, it is a habit of yours. Your customers love buying from catalogs, it is their habit.
  

• Customers who placed their last three purchases via the online channel probably have a 90% chance of placing their next order via the online channel. Guess what? These customers probably don't need as many catalogs (if any). Free Tip: Aggressively test contact frequency within this audience. Save yourself considerable expense and increase profit. Sound good?!
  

• All other customers are in a state of transition. Pay attention to the customers who placed their past two orders within the same channel. These customers are about to form a habit.

E-Mail Responders vs. Internet Visitors

If we believe that e-mail marketing is relevant, then we should participate in the identification of customers who visit our websites because of e-mail marketing.

Take the concepts outlined for catalog and online buyers, and apply them to those who visit your website. If the past three visits happened because of e-mail marketing, you have an engaged customers who is in the habit of using e-mail marketing to interact with your website. Imagine the potential that exists in this relationship.

If your e-mail marketing falls upon deaf ears, then you have a customer that gave you an e-mail address for unspecified reasons, but is not in the habit of visiting your website due to e-mail marketing.

When this happens, what is our response? We try to FORCE A HABIT upon this customer, don't we? We demand that the customer respond to our own marketing habits, we go to great lengths to change the habits of the customer. Will you change your habits in exchange for free shipping on orders over $175? No? Ok, will you change your habits in exchange for free shipping on all orders? No? Ok, will you change your habits in exchange for free shipping on items that have been discounted by twenty percent? And on and on we go.

And then we get frustrated with the fact that our customer base will only respond to discounts and promotions in the subject line of an e-mail.


The Secret Sauce, Your Free Tip:

We marketers experience success when we work within the naturally occurring habits our customers already exhibit. All too often, we seek to change habits, and impose behavior upon customers. Segment your customer base by customers who exhibit consistent habits, and market to the strengths of your customer base.

Career Opportunities And Perceived Value

Tell me the last time you observed these titles at a business-to-consumer organization (non-vendors):

• Vice President of E-Mail Marketing.
• Sr. Director of Web Analytics.
• General Manager of Business Intelligence.
• SVP of Catalog Circulation.
  

It's interesting that many businesses have an executive in charge of information or technology (CIO or CTO). Many businesses also have pay scales that are very favorable to information technology employees. In other words, an e-mail manager might earn a base salary of $75,000 per year, while a comparably skilled information technology individual might earn $90,000 per year. The information technology individual might have a limited career path, but at least she gets compensated for the unique skill set she offers to her company.

Which brings us to the typical e-mail, catalog circulation, web analytics, SAS/SPSS programmer, data miner, or business intelligence individual.

What is the career path for the web analytics individual using software that doesn't even capture 100% of online sales?

What is the career path for an e-mail manager that is given no budget, but is criticized for generating only $0.09 per e-mail delivered?

What is the career path for the SAS programmer who provides the intelligence that an information technology individual cannot provide, yet is considered a "computer geek" by Sr. Management?

What is the career path for a catalog circulation manager that is criticized by eco-friendly organizations for cramming unsolicited junk mail down the throats of helpless consumers?

In my opinion, there is one common theme across each of the four jobs I described ... perceived value.

The e-mail marketer is a spammer. The web analytics individual measures only one channel, and cannot frequently tie out net sales to finance-based reality. The SAS programmer is a computer geek. The catalog manager is always wrong, why would you mail a catalog that 98% of the people hate, can't you only mail the catalog to customers who will purchase?

Remove the information technology expert from your business, and your order entry system might stop taking orders. That's what "perceived value" is all about.

Stop sending e-mail campaigns, stop sending junk mail, stop creating a report that requires a complex merge of e-mail address and multiple mailing addresses, stop showing that conversion rates are flat, and who cares?

Career opportunities are often based on the perceived value of the individual. I know this is true, I've experienced it. I've been told by leadership that I'm not qualified to do any other job than an analytics-based job.

Conversely, merchants, those who choose product, are perceived to have high value, perceived to be able to lead finance individuals or marketers or information technology experts or call center leadership.

So many of my loyal subscribers are e-mail marketers, catalog circulation experts, web analytics professionals, or business intelligence / data mining wizards. Collectively, we have two problems.

• We have low perceived value.
• We do a terrible job of marketing our skills.

Not surprisingly, these two issues are interrelated.

There are three types of employees in the multichannel world.

• Employees with scarce skills, like the folks in information technology.
• Employees with leadership potential or those with the ability to "move the needle" on sales. Think CMOs and merchandising executives, as examples ... especially CMOs, folks who either drive a big increase in sales, or are kicked-out within two years.
  
• The rest of us.

In order to reap the benefits of career opportunities, "the rest of us" must market ourselves as indispensable individuals. Either we cannot be easily replaced, or we provide such significant value (sales, profit, leadership, consumer insights) to the business that we cannot be ignored, or we must market our value to the rest of the organization to increase our perceived value. Otherwise, we must be at peace with our lot in life.

At this point in time, few promotional opportunities exist within multichannel brands for my readers, causing my readers to switch jobs across brands, or to venture to the vendor side of the equation to find opportunities. It might be time for us to start marketing our abilities, to begin increasing our perceived value, or to actually prove that we are highly valuable.

What Would Happen If Each E-Mail Cost $0.05 To Deliver?

When I read what e-mail vendors/bloggers write, I feel pain. I witness folks wishing that the world was different, wishing that e-mail marketers "practiced" great techniques.

When I meet with real-life e-mail marketers, I feel pain. I witness folks who are understaffed, overworked, and underfunded, folks tired of being hounded by vendors/marketers/trade journals telling them they aren't good enough.

It's not a good system ... having one well-intending group badger another to do their best, only to have the other well-intending group not have the resources or incentives to do their best.

What if each e-mail cost $0.05 to deliver to an individual?

Look at pay-per-click. PPC marketers obsess about getting the most profit for the least cost. If you're going to pay $0.50 for 100 clicks ($50.00), you must get at least one order of $120 at a 50% gross margin just to have a fighting chance of profitable success.

Look at cataloging. Catalog marketers must get $2.00 a book in order to pay for the hefty $0.75 cost to print and deliver a catalog. Catalogers must get $5.00 a book to be highly profitable.

Pay-per-click and catalog marketers are driven to excellence because they have no choice ... the cost of marketing is so expensive that performance must be outstanding, or the craft cannot even exist.

E-mail marketers do not have this hurdle. Sure, there are fixed costs associated with e-mail ... but the same level of fixed costs exist in pay-per-click, and more prohibitive fixed costs exist in catalog marketing.

Instead, e-mail marketers can deliver a message for almost no variable cost per e-mail delivered. This really works against everybody in the e-mail, online, catalog and retail marketing channels.

What if each e-mail cost $0.05 to deliver to an individual?

• If each e-mail cost $0.05 to deliver, the e-mail marketer would need maybe $0.15 to $0.20 per e-mail to cover the cost of goods, pick/pack/ship expense, and e-mail delivery expense just to break even!

• If we had to get $0.15 to $0.20 per e-mail just to break even, we would quickly segment our entire e-mail list into best customers, marginal customers, and unprofitable customers. We wouldn't have a list that we blast messages to. We'd have meaningful segments of customers, and we would plan the sales and profit we'd expect from each segment. Yes, we'd run a profit and loss statement on each segment for each e-mail we deliver ... and we'd do this 50 or 100 times a year.
  

• The performance of unprofitable customers would prohibit us from mailing them, allowing us to adhere to the advice of the e-mail vendor/blogger community.

• The performance of marginal customers would prohibit us from mailing them multiple times per week, allowing us to adhere to the advice of the e-mail vendor/blogger community, allowing us to not "over-mail" or "spam" customers.
  

• The sales loss from not mailing unprofitable and marginal customers would drive us to maximize the productivity of best e-mail customers, causing us to demand sales increases.

• In order to improve the productivity of best e-mail customers, we would send multiple versions of e-mail campaigns to multiple customers, based on the merchandise and personal preferences of each customer.

• In order to improve the productivity of best e-mail customers, we would send trigger-based e-mails at the times each individual e-mail customer was most likely to buy something. The message would be targeted and relevant because it had to be targeted and relevant to offset the cost and cause a sales increase.
  

• In order to improve the productivity of best e-mail customers, we would experiment with creative presentation and merchandise assortment. We'd be driven to discover best practices, not simply follow best practices.

• To measure the profitability of our experimentation, we would implement dozens or hundreds of mail/holdout tests annually. We would be required to prove that our new strategies truly drive incremental sales across phone, website and retail channels.

• The mail/holdout groups would teach us so much more about true incremental sales and true incremental profit (across all channels, not just online) that we'd become skeptical of our traditional click-through and conversion rate metrics for evaluating online performance.
  

• By learning the association between featured merchandise and what customers actually purchase across channels, we'd create customized and personalized campaigns that drive the customer to do whatever the customer wants to do, not simply what we want the customer to do.

• By being required to achieve excellence, we'd earn a seat with our leadership teams, helping leadership appreciate the incremental sales and incremental profit driven by e-mail marketing. We wouldn't be seen as that free channel that generates a measly $0.10 per e-mail delivered.

• By delivering e-mail campaigns that actually generate $0.50 or $0.75 or $1.00 per e-mail delivered, we could focus on replacing catalog marketing (expensive) with e-mail marketing (much less expensive), saving trees, helping the environment, reducing expenses.

Right now, none of this is likely to happen, because the incremental cost to deliver an e-mail is too low. At such a low cost, the fundamental laws of direct marketing are not yet applied to e-mail in a meaningful way.

In the catalog industry, we desperately need e-mail marketing to generate enough sales to offset the catalog sales we'll eventually lose due to environmental concerns. We're nowhere close to being there today. I'd like to have a reason to feel optimism. Maybe the reason for optimism is a true incremental cost to deliver an e-mail to a customer.

Survey Results: What Will E-Mail Marketing Look Like In 2015?

Please visit the homepage for this week's survey about Catalog Choice.

About a third of The MineThatData Blog are e-mail advocates. That's what makes the results of this survey so interesting.

Question: What Will E-Mail Marketing Look Like In 2015?

• 24%: E-Mail continues to be a campaign-based branding and promotional tool.
• 8%: E-Mail becomes a trigger-based targeting strategy that increases sales among engaged consumers.
• 56%: E-Mail evolves in ways we cannot yet forecast.
• 12%: E-Mail marketing is a craft that is irreparably harmed by spam, over-mailing, and/or better technology.
  

Very few of you believe e-mail marketing will continue in its current form, even though so many of you actively practice this form of e-mail marketing.

Even more interesting, almost nobody believes what many e-mail pundits tell us e-mail should become, a personalized, trigger-based targeting system.

More than half of you think e-mail will evolve in some way that we cannot yet forecast.

Care to offer your opinion as to how you think e-mail marketing will evolve?

Multichannel Retailer E-Mail Performance

This post talks about a study from eROI about 3rd quarter e-mail marketing performance, suggesting that multichannel retailers have an opportunity to improve performance.

If you are a retailer, you know that the vast majority of e-mail analytics tools significantly undercount multichannel opens and clicks.

Retailers have a huge advantage when it comes to e-mail ... it is called stores!

I've analyzed maybe four hundred different e-mail tests in a retail environment. In all cases, the open and click rates are below industry average. But over a five day period of time, conversion is literally doubled if you count the "incremental" orders driven to stores.

If you are a retailer, and want to demonstrate how effective e-mail marekting is, try this:

• Randomly sample 10% of your e-mail list.
• Split that segment into two groups. One receives your next campaign. One is held out, not mailed your campaign.
• After a week, measure incremental performance between the mailed group and the holdout group.

You will see very different results than you are used to seeing. That's because traditional metrics don't include phone volume (which, interestingly, are often cannibalized) or store sales, in the results analysis.

The table below illustrates the poor results that vendors will tell the world about, vs. the accurate results you'll see via your test and control results.

Traditional Measurement Technique:
	Open Rate			20.00%
	Click-Through Rate			30.00%
	Website Conversion Rate			1.50%
	Average Order Size			$100.00
	$ per E-Mail Campaign			$0.09
Incremental Benefit Of Multichannel E-Mail Campaign
Traditional Measurement = $0.09 Per E-Mail
Test Measurement Indicates $0.20 Per E-Mail
	Phone	Website	Stores	Total
Mailed Group	$0.50	$0.50	$3.00	$4.00
Holdout Group	$0.53	$0.39	$2.88	$3.80
Incremental Lift	($0.03)	$0.11	$0.12	$0.20

Do you see the big difference?

When measured like the vendors measure results, you get $0.09 per e-mail. When measured via test/control groups, you get $0.20 per e-mail, because you observe the incremental increase across all channels --- fulfilling the promise of "multichannel" marketing, huh?!

To my multichannel marketing audience --- please don't get discouraged by folks who suggest your e-mail performance is poor. Just keep measuring things in an accurate manner, across all channels. Your performance is much better than the experts tell you it is!

E-Mail And Catalog Profit Visualization

"Back in the day" at Lands' End, we had a team that measured the profitability of every spread in our core catalogs.

Even though this information was stored in a database for easy retrieval, the most effective presentation of the profitability of each spread (in my opinion, or IMHO to use the parlance of the day) occurred in a conference room.

Each spread was adhered to colored tag board.

• Gold Tag Board = 30% or better variable operating profit for that spread.
• Green Tag Board = 20% to 29.9% VOP for that spread.
• Blue Tag Board = 10% to 19.9% VOP for that spread.
• Red Tag Board = Worse than 10% VOP for that spread.

When we sat down to review a catalog, each spread was posted in the conference room, in order, from page 2-3 to the back cover.

Instantly, the "profit story" became clear. Visually, a rookie database marketer like myself could see what worked, what didn't work. Visually, I could see how merchandising and creative themes interacted to generate profit. I could see how one model yielded gold/green results, while another model turned customers off.

If you are an e-mail marketer, and you wish to effectively communicate with old-school marketers at your company, give this strategy a try.

Maybe you sent 20 e-mail marketing campaigns last quarter. For each campaign, sum the performance of all of your targeted versions, and adhere the main creative treatment to a piece of colored tag board. Do this for each of the twenty campaigns, and post the performance for all to see.

Each targeted version gets real estate on the tag board as well, with its own background color (gold, green, blue, red, or whatever scheme you wish to employ). Most certainly, you're measuring the profitability of each targeted version of an e-mail campaign, rolling the profit of each version up to a total level of profitability, right?

Invite your old-school CMO into the conference room, and review your twenty campaigns in this manner. Stop talking about open rates, click-through rates, conversion rates, landing pages, Outlook 2007, HTML vs. Text, rendering problems on mobile phones, and all the other gobbelty-gook that causes your old-school CMO to tune out. Simply focus on the colors. Explain how you're going to do more "gold and green" strategies. Explain why the CMO's recommendations resulted in "blue and red" performance.

And then, behind the scenes, build an OLAP-styled repository to store your historical results. Store open rates, click-through rates, conversion rates, dollars-per-e-mail, sales driven to the telephone, sales driven to stores, test results, profitability, and "gold/green/blue/red" status.

By the time your CMO is comfortable with your presentation style, you might even be able to surprise her with your OLAP-styled repository. Ok, maybe not!

And if you practice web analytics for a profession, would it be so hard to apply these principals to your landing pages, so that you can bridge the gap between all of your fancy data and the old-school marketers who don't understand what you're talking about? Give it a try!

E-Mail, Paid Search, Portal Advertising, Channels

How do you evaluate and segment customers who respond to e-mail marketing, paid search, natural search, portal advertising, shopping comparison sites, affiliates, and any other advertising channel?

Are these customers fundamentally "different" than other customers?

Do you treat these customers differently across various marketing strategies?

Most important, how do you evaluate the interactions that occur when customers respond to different advertising channels? For instance, should your e-mail marketing strategy be different for customers who respond to both search and e-mail, vs. customers who only respond to e-mail?

E-Mail Success, or E-Mail Failure?

Many of you now know that I'm a fan of e-mail marketing, but I'm not a fan of e-mail performance.

Any direct marketing activity that drives the volume (per e-mail) that e-mail delivers is immensely frustrating to me.

Sometimes, however, we get down on ourselves, when in reality there is room for optimism.

Take this example. In 2005, a company had an e-mail subscriber file that averaged 1,000,000 names. One campaign was sent per week, generating $0.15 per e-mail delivered. In total, the annual sales generated by e-mail marketing was 1,000,000 * 52 * $0.15 = $7.8 million.

In 2006, the e-mail marketing team was disappointed with the following results: The average subscriber file was 1,300,000 names. There were 60 campaigns during the year. Each campaign drove an average of $0.13 per e-mail delivered. In total, the annual sales generated by e-mail marketing was 1,300,000 * 60 * $0.13 = $10.1 million.

Was e-mail marketing a failure because productivity decreased from $0.15 per e-mail to $0.13 per e-mail?

Or was e-mail marketing a success because annual sales increased from $7.8 million to $10.1 million?

All too often, we focus on "SMALL" metrics. Open rates, click-through rates and conversion rates are all "SMALL". SMALL times SMALL times SMALL = Really SMALL!

Chief Executive Officers, Chief Financial Officers and Chief Marketing Officers don't like to hear about small metrics --- especially small metrics that decrease. Who wants to learn that only one in seven hundred recipients purchased from an e-mail campaign?

Executives like to hear about BIG numbers ... like an increase in performance from $7.8 million per year to $10.1 million per year. That's an increase of 29%, an increase of $2.3 million dollars. Those are BIG numbers.

When working with your leaders, focus on BIG numbers. Work your tail off behind the scenes to improve e-mail productivity. But when working with the highly paid folks, tell a positive story using BIG numbers.

Results From The E-Mail Marketing Budget Post

Each week, I am pitched by e-mail vendors, folks asking for access to my client base, or asking me to blog about their services to you, the loyal reader.

These e-mail marketers, researchers, and vendors are hopeful that corporations will increase their e-mail marketing budgets, so that vendor products and services might be considered.

A little over three days ago, after another week of pitches, I gave the vendor community an opportunity to discuss how a hypothetical corporation might increase their marketing budget, and to quantify the sales impact of various strategies.

Here is a link to the challenge:

How many comments did I receive from the vendor community?

Zero.

One way to impress the client-side of the vendor/client relationship is to offer useful and actionable thought leadership. Given the number of pitches I receive, vendors, researchers and marketers missed an opportunity.


In this example, the e-mail marketer generated $10,400,000 demand per year by blasting a million e-mails per week, 52,000,000 per year. I asked folks to offer strategies that might increase demand, profit and ROI, quantifying the impact for my readers.

Let's talk about a few topics.


E-Mail Frequency: In this example, the corporation chose to send one campaign per week. Here is a table that illustrates the expected demand, profit and ROI based on number of contacts:

Annual E-Mail Return On Investment By Frequency (in 000s)
	Demand	Cost	Profit	ROI	$/E-Mail
1 Contact Per Month	$5,200	$250	$1,570	628.0%	$0.43
1 Contact Per Week	$10,400	$1,000	$2,640	264.0%	$0.20
2 Contacts Per Week	$14,708	$2,000	$3,148	157.4%	$0.14
3 Contacts Per Week	$18,013	$3,000	$3,305	110.2%	$0.12
4 Contacts Per Week	$20,800	$4,000	$3,280	82.0%	$0.10
5 Contacts Per Week	$23,255	$5,000	$3,139	62.8%	$0.09

Companies that do thorough e-mail contact strategy testing have learned several interesting facts. Notice that it is possible to start losing money as e-mail contact frequency increases. Increased frequency dilutes demand per e-mail --- so that even at a very minimal cost per e-mail contact, profit begins to decline after three e-mail contacts per week (in this example --- your mileage may vary).


E-Mail Targeting: Targeting strategies can effectively increase demand per e-mail. Many companies in my industry have an e-mail list where between ten percent and fifty percent of the list have no customer information appended to it. In other words, all you know about these folks is their e-mail address. You're not going to improve performance via targeting with these individuals.

With the remaining individuals, you might get a 30% increase in demand by executing e-mail targeting strategies. The weighted average of these two populations results in a conservative increase in demand of, say, 20%. The following table overlays the 20% increase in performance, adding the marginal cost required to execute the targeting strategy.

Annual E-Mail Return On Investment By Frequency (in 000s)
	Demand	Cost	Profit	ROI	$/E-Mail
1 Contact Per Month	$6,240	$269	$1,915	712.7%	$0.52
1 Contact Per Week	$12,480	$1,075	$3,293	306.3%	$0.24
2 Contacts Per Week	$17,649	$2,150	$4,027	187.3%	$0.17
3 Contacts Per Week	$21,616	$3,225	$4,341	134.6%	$0.14
4 Contacts Per Week	$24,960	$4,300	$4,436	103.2%	$0.12
5 Contacts Per Week	$27,906	$5,375	$4,392	81.7%	$0.11

Let's say your Chief Marketing Officer doesn't want to "spam" customers ... so the CMO allows you go to from one e-mail campaign per week to two targeted e-mail campaigns per week, each targeted campaign having five creative versions sent to customers based on past purchase history, past clickstream behavior, and past website preferences. Let's compare the expected results, current program vs. proposed program.


Current Program: 1x Per Week, Same Version To All Customers

• Demand = $10,400,000.
• Marketing Cost = $1,000,000.
• Profit = $2,640,000.
• ROI = 264.0%
• Demand per E-Mail = $0.20.

Proposed Program: 2x Per Week, Customer Receives One Of Five Possible Contacts

• Demand = $17,649,000.
• Marketing Cost = $2,150,000.
• Profit = $4,027,000.
• ROI = 187.3%
• Demand per E-Mail = $0.17.

Notice the difference in results between the current program and the proposed program.

Demand increases by 69%.
Marketing expense increases by 115%.
Profit increases by 52%.
ROI DECREASES.
Demand per E-Mail DECREASES.


My guess is that your CFO will be happy with you if you demonstrate that you'll double your e-mail budget, while delivering a 52% increase in profit and a 69% increase in demand.


What Did We Learn?

First, e-mail marketing is a lot like catalog marketing. There are simple ways to quantify the impact of frequency and targeting. Go ask the catalog marketer down the hall to help you, if this type of work is a challenge for your organization.

Second, once we quantify the impact of these strategies, investment in e-mail marketing is self evident. You'll quickly find the optimal contact strategy, one that yields an increase in demand and profit. The investment quickly cost-justifies itself.

Third, the outcome of the analysis points to areas where you may need help. You'll probably need help developing a targeted e-mail scoring algorithm. I've created many of these, I'm sure your e-mail vendor does a great job as well. The targeting algorithm is where the benefit occurs. I baked those costs into the example.

Fourth, you'll probably benefit by having a campaign management software tool to integrate the scoring algorithm with your selection criteria. If you're a cataloger, you are probably using Unica Affinium for catalog campaign management. Simply apply Affinium (or your campaign management tool or even use SAS/SPSS), and send the list with targeted versions by e-mail address to your e-mail vendor for blasting purposes. I baked these costs into the example.

Fifth, start demanding more of your e-mail vendors. Fluffy pitches and glowing articles mean little. In this example, ROI (as catalogers know) actually decreases! Yet, demand and profit increase. ROI doesn't pay the bills --- actual profit dollars pay the freight, keeping you employed.

Sixth, while not included in this analysis, you'll want to monitor opt-out rates as frequency increases. At one company I worked with, we noticed that if we went past "x" e-mail campaigns per week, too many people opted-out, causing us to lose all the profit we gained via the targeting strategy.

Ok, your turn. What strategies would you recommend, and what would the increase in demand and profit be after implementing these strategies?

A Question For E-Mail Multichannel Marketers

Ok e-mail marketers, here's a question for you:


You send a catalog to customers on Monday, expecting to get $3.00 demand per catalog.

Next, you send an e-mail campaign to customers on Wednesday, expecting to yield $0.20 demand per e-mail sent.

A customer receives both the catalog, and the e-mail campaign. The customer does not open the e-mail campaign, does not click-through the e-mail to the website.

On Sunday, the customer visits the website, and chooses to order merchandise. The customer spends $100.00.


I have a feeling that the catalog marketers want credit for the full $100.00 order.

I want to hear from you, the e-mail marketer. How much of the $100.00 order should be allocated to the marketing activity you executed on Wednesday?

Measuring Multichannel Results

Click on the image to enlarge it.

At some multichannel merchants, the E-Mail Marketers, Catalog / Direct Mail Marketers, Web Analytics Team, and Business Intelligence / SAS Programming team work together on projects.

These folks don't have to all reside in the same department.

But it's good for business when they all work together.

In this instance, the CMO wanted to send an e-mail marketing campaign on a Thursday afternoon, much to the consternation of the e-mail marketing team. See, the e-mail marketing team felt that campaigns should be sent on Monday or Tuesday, in order to maximize conversion rate. The Web Analytics team concurred.

The CMO is the CMO, however. She demanded a campaign be sent on Thursday. She wanted to drive sales in her retail stores, as well as online.

The e-mail team wanted to "test" the incremental value of this strategy. They set up a control group, a group that would not receive the e-mail campaign.

The e-mail marketing team was used to generating $0.25 of incremental sales online when sending a Tuesday e-mail campaign. The campaigns were seldom designed to drive retail traffic.

When the campaign was completed, the e-mail marketing team partnered with the web analytics team. The results weren't encouraging.

Open Rate = 20%.
Click-Through Rate = 30%.
Conversion Rate = 2%.
Average Order Size = $167.
Sales Per E-Mail = $0.20.

The e-mail marketing team shared the results with the business intelligence / SAS programming team. This group had access to retail sales and catalog/telephone transactions. They wrote a program to analyze sales by day. The results are outlined in the image at the top of this post.

• When measured via e-mail marketing tools and the web analytics platform, it appeared that the e-mail campaign generated $0.20 sales per e-mail.

• When results are measured by channel, by day, a different story reveals itself (of course, a good marketer will test for statistical significance, a step omitted here for brevity).
  

• The e-mail campaign drove online sales on Thursday and Friday alone. Sales were not incrementally increased on Saturday, Sunday or Monday.

• The e-mail campaign drove retail sales on Saturday and Sunday, high-traffic retail days. In total, an incremental $0.14 were generated at retail by the e-mail campaign.

• The e-mail campaign appears to have cannibalized catalog/telephone sales.

• In total, the e-mail campaign actually drove $0.29 sales across channels. The campaign was 45% more effective than e-mail analytics and web analytics tools suggested.

This example, similar to an actual campaign I recently analyzed, demonstrates the importance of having cross-functional teams work together in a collaborative manner.

Simple open rate, click-through rate and conversion rate metrics do not tell the entire story. Simple mail/control testing, analyzed off of an integrated database, can illustrate customer behavior that may not have been anticipated.

For direct mail and e-mail marketers, the findings highlight an important trend in multichannel marketing.

• E-Mail and Direct Mail campaigns sent between Monday and Wednesday often benefit the phone and online channels.

• E-Mail and Direct Mail campaigns sent on Thursday or Friday often benefit the retail channel.

Your job is to work together as a collaborative unit, illustrating the in-home date that is best for the customer, and is best for the profitability of your company. Your CMO can develop a more effective multichannel strategy if you give her the tools to do so!

Return On Investment (ROI) In Direct Marketing

Click on the image to enlarge it.

We hear a lot of talk about ROI, or "Return On Investment", when evaluating direct marketing programs.

Catalogers know that paper drives more total sales, and more total profit, than any other form of direct marketing.

E-Mail marketers know that e-mail drives the best "ROI", measured as "total profit divided by total cost". E-Mail marketing has almost no cost associated with it, making it a tool marketers must use, and use properly.

Paid Search marketers know that they reach customers at a "time of need", thereby providing the most "efficient" form of advertising known to-date. No other form of advertising cuts out the waste of uninterested shoppers like paid search ... except I guess for natural search, which has no cost associated with it.

Portal marketers know that they make the brand known to customers who have not purchased previously. They know their investment is best measured on a "lifetime value" basis ... short-term metrics are not appropriate for portal advertising.

In the table attached to the top of this article, each form of advertising has various strengths and weaknesses. Your job is to evaluate your advertising objectives.

Objective: Drive large volume of sales/profit from existing customers.
Solution = Catalogs.

Objective: Precisely target merchandise to existing customers.
Solution = E-Mail, Paid Search.

Objective: Precisely target merchandise to customers in-need.
Solution = Paid Search.

Objective: Make your brand aware to potential customers.
Solution = Portal Advertising.

Objective: Acquire new customers.
Solution = Catalog, Portal Advertising, Paid Search

I didn't even talk about affiliate marketing or shopping comparison marketing, which also fit into this story.

Obviously, there are many different objectives and solutions, my list above is abbreviated and short. Strategically, consider what you want to accomplish, and allocate your advertising mix on the basis of total sales, total profit, and your objectives.

Don't be swayed by folks who tell you that one form of advertising is "better" than another. Each type of advertising has a purpose. Each type of advertising excels within one specific set of metrics.

Multichannel Retailing Week: E-Mail Marketing

The multichannel e-mail marketing manager faces a unique set of challenges that are not well understood by those not working in multichannel retail e-mail marketing.

Within the e-mail marketing industry, the focus isn't always on driving increased sales through brilliant merchandising or creative presentation. The multichannel e-mail marketer learns about the importance of targeting strategies, plain text vs. html, double opt-ins, unsubscribes, trigger-based messages, alerts, spam filters, rendering issues, personalization, preview panes, blacklists, preferences, animated GIFs, open rates, click-thru rates, conversion rates and a veritable plethora of technical terms plague the e-mail marketer every single day.

Those who are not actively involved in e-mail marketing at multichannel retail organizations could care less about any of the issues that consume the time spent by multichannel e-mail marketing experts. They believe that it costs essentially nothing (after accounting for fixed costs) to send an e-mail campaign to a customer.

Merchants want e-mail marketers to feature their specific product or department in every single e-mail campaign. They want all customers to see their product, multiple times per week. They want to "expose" the customer to the merchandise they are offering. Targeting is a compromise, one that drives increased sales and profit. But targeting doesn't make merchants happy, because their merchandise is not being featured to the entire audience.

So the multichannel e-mail expert does their best to make compromises, and spends considerable time explaining targeting strategies. Merchants blame multichannel e-mail experts if the merchandise doesn't sell well, believing the wrong customers were targeted.

One of the biggest problems facing multichannel e-mail marketers is what I call "integrated measurement". E-mail marketing systems are often set up as separate systems from the rest of the database marketing infrastructure. This creates significant challenges for the multichannel e-mail marketer.

First, e-mail marketing does drive sales to the retail channel. The e-mail marketer is given access to open rate, click-thru rate and conversion rate information over a short period of time, say twelve hours. The e-mail marketer generally sees these metrics for only the online channel. Response that occurs in retail stores, or even the telephone, are often not measured by e-mail marketers.

Worse, response to e-mail campaigns is "terrible". We always hear that e-mail ROI is far better than in any other marketing channel. That will always be the case when the incremental cost of sending an e-mail is essentially zero. Multichannel e-mail marketing expert knows that only one in seven-hundred customers who receive an e-mail actually buy something. An e-mail campaign will drive between $0.15 and $0.35 of sales per e-mail. A catalog will drive $1.00 to $10.00 of sales per catalog. This really hurts the multichannel e-mail marketing expert. Merchants know that other forms of advertising drive better sales volumes --- and consequently, treat the multichannel e-mail marketing expert with less respect than is deserved.

Over the next ten years, the multichannel e-mail marketing expert will be well-served by integrating with the rest of the organization. Test/control measurement techniques will reveal that e-mail marketing drives equal amounts of sales to the online and retail channel --- causing multichannel e-mail marketing experts to realize their campaigns are twice as effective as previously believed to be. Measurement will focus more on the long-term relationship building aspect of e-mail, less on the impact of re-shuffling sales into a twelve hour period of time following the delivery of an e-mail campaign. As online marketing becomes more expensive, as catalog postage rockets skyward, the multichannel organization will better appreciate the potential of e-mail marketing. The multichannel CFO will invest in database marketing integration between catalog, online and e-mail marketing. Personalized and dynamic e-mails will eventually become the norm --- and ultimately, e-mail and RSS will become essentially the same marketing tool.

Strategically, the multichannel e-mail marketing expert will spend less time with his/her "flock" of professionals across the industry. The multichannel e-mail marketing expert will learn the communication style necessary to be highly effective, and will earn more respect within a multichannel business. Communication will focus more on the annual contribution of e-mail campaigns (which is significant), less on the campaign contribution of e-mail (which is largely insignificant). Communication will be holistic, so that store employees understand that they are benefiting from e-mail.

Eventually, we multichannel retailers will learn that e-mail is a great tool for communicating events and product introductions, and a good tool for complementing sales of individually advertised items. With luck, we'll get away from using e-mail as a "sale", "promotion", "free shipping" and "%-off" marketing tool. We will instead invest the time in developing unique merchandising strategies and creative presentations that truly increase sales, and set our business apart from others employing "best practices" that result in a feel of "sameness" across retailers. When this happens, multichannel e-mail marketing experts will be revered.

Your turn. What are the multichannel e-mail challenges that you face in your multichannel retailing organization?

Three Ways To Increase E-Mail Sales

Businesses with customers who purchase fewer than three times a year seldom benefit from trigger-based e-mail marketing campaigns (with the notable exception of shopping cart prompts, which often work well).

There are at least three key factors that can be managed, to grow e-mail sales.

Factor #1 = Incremental List Size, Managed By Contact Frequency

Factor #2 = Incremental Demand Per Contact, Managed By Contact Frequency

Factor #3 = Demand Per E-Mail, Managed By Number Of Targeted Versions


Incremental list size is ultimately determined by the number of e-mail campaigns sent per week. When a customer is contacted too often, too many customers unsubscribe, driving down the total size of the e-mail list. Strategically, management may choose to execute "x" campaigns per week. Mathematically, the number of e-mail contacts per week can be determined by the number that still cause a healthy increase in the number of valid names available to be e-mailed. In the table below, you'll see that two e-mails per week are optimal, as the e-mail list continues to grow.

Incremental demand per contact is also important. As you increase e-mail frequency, you will decrease the performance of any one e-mail contact. Increased frequency will probably cause cannibalization between e-mail campaigns. The table below shows that the combination of unsubs and performance dictate two e-mail campaigns per week.

Targeted versions of an e-mail are important as well. Few retailers have the ability to dynamically create unique e-mail campaigns for each customer. As a result, management creates "x" versions of an e-mail campaign, offering different merchandise in each version. The analytics team decide which version of an e-mail campaign the customer receives, on the basis of past purchase behavior, stated customer preferences, clickstream history, and other factors. From a staffing standpoint, it could be a challenge to produce numerous versions.

In the table below, I assume that a company managed one version of an e-mail, one time per week, to the entire e-mail file. This strategy yielded $20,700 of demand per week.

Going from one campaign a week to two campaigns per week kept the file size increasing, reduced volume per e-mail, but resulted in $30,030 of demand per week. Clearly, this is a better strategy than sending just one e-mail campaign per week.

Going from one version per campaign to nine versions per campaign drove $40,040 of demand per week. Assuming this strategy can be managed with existing staff at minimal cost, this strategy could work.

Notice that the combination of list size (dictated by frequency), demand per contact (dictated by frequency), and version contribution cause a doubling in e-mail volume, on a weekly basis.

Catalogers have long mastered this type of analysis, assigning profitability to each strategy. With e-mail, profitability is not as big an issue, so if one can avoid the fixed costs associated with incremental staffing, a move to moderate frequency with increased versions can yield a significant increase in e-mail sales.

Obviously, there are many ways to increase e-mail volume. These three basic strategies almost guarantee a positive return on investment.

No Targeting Strategy
Contacts	List	New	Unsubs	Net	$ per	Weekly	Total
per Week	Size	Subs	& Invalids	Names	E-Mail	Demand	Demand
1	100000	1000	650	100350	$0.20	$0.20	$20,070
2	100000	1000	900	100100	$0.15	$0.30	$30,030
3	100000	1000	1150	99850	$0.12	$0.36	$35,946
With Targeting Strategy: 2 Contacts Per Week
Targeted	List	New	Unsubs	Net	$ per	Weekly	Total
Versions	Size	Subs	& Invalids	Names	E-Mail	Demand	Demand
1	100000	1000	900	100100	$0.15	$0.30	$30,030
5	100000	1000	900	100100	$0.18	$0.36	$36,036
9	100000	1000	900	100100	$0.20	$0.40	$40,040