March 23, 2014

Monday Mailbag

Email me ( your questions for next week's Monday Mailbag.

This week's question comes to us from a person attending NEMOA who wished to remain nameless.
  • Isn't it obvious that customers who use multiple channels are worth much, much more?
Remember this beauty from McKinsey Consulting, circa 2001?

This chart was labeled "The Multichannel Bonanza".

I've talked about this before, but it is a difficult concept for people to get their heads around. Best customers do everything. Everything. 

Think about it this way. When you acquire a customer for the first time, that customer has one purchase. That customer cannot possibly be in any of the intersections in the venn diagram. When the customer buys for a second time, the customer, by definition, can be in one of the intersections. The intersections, of course, are pre-defined - they can only include customers who are more valuable.

The intersection of all three audiences can only happen if the customer has chosen to purchase at least three times. By definition alone, those customers are already more valuable because they have a minimum of three historical purchases - of course they're valuable!!!

Do not let people mislead you with sexy-sounding metrics.