July 07, 2009

Selling Your Business? Shutting Down A Channel?

Sometimes you're looking for an exit strategy. You might want to sell a business, or you might want to shut down a brand/channel. Or maybe you just want to know what would happen if you were ever forced to make a key business decision.

I'm asked to look at these situations. The company sends me data, and then asks me to project how the business is going to evolve over the next five years. Here's an example (click on the image to see it more clearly).

This brand wants to save expense by not doing any customer acquisition in channel #2. Well, we can estimate the long-term impact of that decision. Take a look at this scenario:

This is a pretty typical outcome. I usually find that products, brands, and channels interact with each other. In other words, when you make significant changes to one part of your business, another part of the business either improves, or suffers. In this case, the primary channel begins to decay over time, as it is starved of the customers that were acquired by customer acquisition activities that have been discontinued in another channel.

The tools and techniques to do this kind of work are readily available in my Multichannel Forensics book.

If you are thinking of selling your business, or you are thinking of shutting down a business unit, or you are thinking of discontinuing expensive customer acquisition activities in a channel, give me a holler. These projects are easily addressed by the Multichannel Forensics framework, and I can turn them around really fast if there isn't a lot of data exploration or segmentation work required.