I've never understood the logic.
When confronted with two customers, the folks I speak with routinely prefer Option 1:
- Option 1 = Acquire a customer via a preferred advertising channel for $10 profit, customer pays back $20 in the next twelve months, net profit = $10.
- Option 2 = Acquire two customers via online channel or offline mass-media channel for $10 profit, customer pays back $16 in the next twelve months, net profit = $6 * 2 = $12.
Our future requires us to take on more "two-for-one" relationships. We need to acquire two customers at a lower value (and no, I'm not talking about 20% off plus free shipping as an incentive), and prioritize that over acquiring one customer at high value.
Honestly, we determine long-term value. Catalogers, in particular, sabotage long-term value by mailing online buyers twelve catalogs a year, then incorporate 30 day and 60 day matchback windows, meaning that every future order is tied to a catalog, when the customer could be far more profitably mailed four times a year if the business factored in the organic percentage. This alone changes the long-term value equation in favor of an online customer.
Again, we're going to need to focus on finding two-for-one deals, two customers with lower value that are greater than one customer with high value.