September 21, 2015

It's Hard To Learn How Valuable A Tactic Is Until You Stop (Or Start) Performing The Tactic

There are now five components of my system:
  1. Annual Repurchase Rates dictate the strategy a marketer needs to employ - and in most cases, that strategy is to find a ton of new customers.
  2. If we have to find a ton of new customers, and most of us have to find a ton of new customers, we need healthy levels of merchandise productivity to get the job done.
  3. If we have poor merchandise productivity, we optimize via profit to get the most out of a bad situation. If we have good merchandise productivity, we optimize via profit to obtain healthy sales and profit growth.
  4. It is very difficult to sustain long-term annual repurchase rate increases, new customer increases, or profit optimization without healthy new item development. Therefore, new item development is a critical component of business health.
  5. Channels seldom offer multiplicative gains. Channels interact with each other, causing customers to make tradeoffs instead of spending more money.
The sixth component is this ... "It's hard to learn how valuable a tactic is until you stop (or start) doing the tactic".

Another way of saying this is "let's test it!"

It's hard to know whether you should open a Nordstrom Rack store within a third of a mile of a Nordstrom Full Line Store unless you test doing it in one market.

It's hard to know whether you should personalize your email campaigns or if you should "batch-and-blast" them via the condemnation of the pundits out there.

It's hard to know what might happen if you discontinue your catalog marketing program unless you discontinue the program for a year or more to a subset of your audience.

It's hard to know if retargeting works or not unless you stop retargeting to a customer audience for six months.

It's hard to know if a full digitization of your retail channel works or not unless you try a full digitization of your retail channel in a select number of markets.

It's hard to know if social media provides customer service benefits unless you allow your social media team to provide customer service benefits to your customer base.

Almost all of the components of my system are strongly influenced by prior testing outcomes.

It's been my experience that many companies are afraid to spend money on new tactics (#roi) ... and that many companies are afraid to discontinue existing tactics. It is hard to learn how valuable a tactic is until we stop (or start) doing the tactic.

I couldn't have possibly known that I could reach a much younger and energetic audience via my analytics podcast unless ... unless ... unless I decided to start performing the podcast. Until then, everything was theoretical. Now I know the result. A highly positive result.

There are now six components in my system, with one more to follow:
  1. Annual Repurchase Rates dictate the strategy a marketer needs to employ - and in most cases, that strategy is to find a ton of new customers.
  2. If we have to find a ton of new customers, and most of us have to find a ton of new customers, we need healthy levels of merchandise productivity to get the job done.
  3. If we have poor merchandise productivity, we optimize via profit to get the most out of a bad situation. If we have good merchandise productivity, we optimize via profit to obtain healthy sales and profit growth.
  4. It is very difficult to sustain long-term annual repurchase rate increases, new customer increases, or profit optimization without healthy new item development. Therefore, new item development is a critical component of business health.
  5. Channels seldom offer multiplicative gains. Channels interact with each other, causing customers to make tradeoffs instead of spending more money.
  6. It is hard to learn how valuable a tactic is until you stop (or start) performing the tactic.