May 13, 2009

Answering Your Questions

Here's what you're asking me ... your actual questions, either live and in person, or via the magic of the digital realm:

Question: My core customer is 57 years old. She was 52 years old five years ago. Does this mean that all of my customers are going to be dying soon? Answer: Folks, this question actually comes up, and often. When catalogers entered the "multichannel era", as defined by our vendor/trade-journal leaders, we took our eye off of customer acquisition. We followed our best customers, we catered to their advertising preferences and merchandise needs. Houston, we've got a problem. Not an insurmountable problem, mind you, but one that we must address. The 2010s will be all about acquiring customers. We don't have a choice.

Question: What drives the organic percentage? Is it brand loyalty? Answer: Some of you have implemented mail/holdout tests in e-mail and catalog marketing, and have learned that a significant share of the business that was attributed to e-mail and catalog marketing campaigns actually happens anyway. This percentage of volume that happens anyway is known as the "organic percentage". It is a combination of convenience, brand loyalty, and marketing saturation. You'll shop from your local mall-based Bose store because it is convenient and because your friends have the Companion 5 series speakers. You'll shop from the L.L. Bean catalog, whether they send you 13 a year or 8 a year ... marketing saturation plays a role, too.

Question: Your Zip Code Forensics maps seem to indicate a growing problem. Rural, 55+ year old lower-income folks seem to align with old technology, while urban/suburban wealthy youngsters are aligned with newer technology. Isn't this a problem? Answer: There are the obvious sociological problems associated with technology, they are well documented. For the readers of this blog, multichannel marketing is being ripped apart by the differences in demographic/psychographic between old school marketing and technology-enabled marketing. The Catalog audience and Twitter audience are not complementary, they are mutually exclusive. The E-Mail audience and Social Media audience were identical six years ago, but now, the Social Media crowd is de-tethering from E-Mail, leaving two non-complimentary audiences. Multichannel Advocates will be forced to alter the marketing strategy of the 2010s, speaking with a similar voice to very different micro-channel audiences via different messages ... the opposite of what we've been taught.

Question: You don't follow anybody on Twitter. Why? Are you so arrogant to assume that you cannot learn from others? What is wrong with you? Answer: Oh, I enjoy getting this one. First of all, I follow a lot of folks on Twitter, but I purposely don't do it via the "follow" button in Twitter ... so you aren't counted. I've said it before, I do this because I want to show that you can gain a following by providing interesting content, not simply by getting followers by following others --- the current established best practice. I will say this. So much of what is put out there by the Twitterati isn't actionable. Are we using a tool because it has a strategic purpose, or are we using a tool because it is new and shiny, or are we using a tool because we want to tell people we just ate a tasty garden salad? If the latter, the content has to be really good in order for somebody to follow.

Question: Acquire New Customers or Retain Best Customers? Answer: I strongly lean toward acquiring new customers, with a caveat. If your business is in Retention Mode, then retaining your best customers is critical. If your business is in Hybrid Mode or Acquisition Mode, then the majority of your long-term success will come from acquiring new customers. I've literally run thousands of simulations ... in Hybrid or Acquisition Mode, the #1 key to long-term success is the ability of a business to acquire new customers. This is a secret that the vendor/trade-journal industry doesn't share with you.

What questions do you have? E-Mail them to me, and I'll offer answers.

2 comments:

  1. I think it's great that you took the time to answer the questions asked to you.

    I'm not sure I agree with you on whether you should focus on acquisition of new customers or retaining old. Retaining old customers costs so much less than trying to bring in new ones (not that you shouldn't grow your company!); but, repeating customers tend to do more business with you than first time customers.

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  2. 8 in 10 people would agree with you and disagree with them.

    When I run my simulations, any company that has a 60% or less annual retention rate is in constant need to fuel customer acquisition.

    http://minethatdata.blogspot.com/2009/05/death-spiral.html

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