June 06, 2011

Multi-Channel Merchandise Productivity

Sometimes we go way too deep into our attribution activities.  We want to tie every sale to every marketing activity.

And when we do that, we lose sight of what matters.

What matters, of course, is whether an item generates profit or not.

I like to simplify things.  Roll your data up on a quarterly basis.  For instance, measure item performance from January - March.  Sum all of your catalog expense across each time the item was featured in a catalog.  Do the same thing for search, for e-mail marketing, for all other online marketing activities.

Run a profit and loss statement for each item, during the quarter.

In this case, item #2 did not generate the sales that item #1 generated, but item #2 did generate more profit.  This is the type of analysis we need, the type of analysis that is sorely missing in our channel-based, attribution-focused, tweeting-simple-kpi's world.

Focus on how merchandise performs across channels.  Spend less time focusing on channels!!  Merchandise can sell without channels.  Channels cannot exist without merchandise.

1 comment:

  1. This is the most proper way to report productivity. Thanks!

    ReplyDelete