Sports / Business Philosophy

I came across this quote in the book Bill Walsh (49ers coach in the 80s) wrote sometime back ... I have a copy out in the Casita, and there aren't many copies available. This quote was featured on Bluesky from a football coach. I circled the quote in orange.

"You start first with a structural format and basic philosophy ..."

What is your "structural format" and "basic philosophy"?

I can outline mine ... quickly.

• There is nothing more important than what you sell ... the only reason a customer buys from you is because you sell something that the customer needs or wants.
• Unless your annual repurchase rate is sixty percent or greater, the single most important marketing function you must perform is a non-stop all-consuming focus on customer acquisition.
• Instead of focusing on customer loyalty, focus on converting a first-time buyer to a second purchase ... quickly. By doing so today, you will have more loyal buyers tomorrow.

The most successful companies I work with excel at all three endeavors outlined above.

What is your "structural format" and "basic philosophy"?

September New Customers

You've got six(ish) weeks to get ready for the best month to acquire new customers ... September! Nearly every project I work on for brands with a strong Christmas Season indicate that September is the best month to acquire new customers. Learn more by watching this brief video (click here).

Great Moments in Outsourced Link Management History

Probably my greatest professional moment ... at the absolute peak of my consulting powers, came back in 2012. It was a simpler time ... so much less stupidity and corruption ... Macy's was viewed as an omnichannel leader for the ages ... catalog brands weren't being fired by their printers and catalogers were easily able to procure paper from their favorite paper rep. In my world, I was writing parables via the "Gliebers Dresses" framework. 

Why? 

A trade journalist and a consultant collaborated to nuke my reputation, publishing a hit piece in a blog hosted by what was called at the time "Multichannel Merchant". I lost more than half of my business as a consequence (for about nine months), in case you're wondering why I have issues with trade journalists.

I was able to rebuild my business via the "Gliebers Dresses" framework. I could talk about industry issues without having to have a vendor or consultant or paper rep or trade journalist take me down ... what are they going to do, get mad at Roger Morgan, the Chief Operations Officer of a fictional catalog company?

But I digress ... at the peak of my powers, I wrote a bit about a Marketing Executive having women wearing dresses from Gliebers Dresses in a television commercial with Colbie Caillat's "Brighter Than The Sun" playing in the background. Just a throwaway line in a story about corporate stupidity.

Two months later, Chicos released a commercial with two women wearing Chicos clothing ... with Colbie Caillat's "Brighter Than The Sun" playing in the background.

Odd coincidence, don't you think? Here's the link. I mean, they read my content most days ... I had the data to prove it.

These moments were lost to the digital scrap heap of history ... until an agency used by Chicos reached out, asking me to update a link in the post to reflect the current URL of their website.

If you are paying an agency $$$ to ask the agency to spend time talking to an analytics blogger about a "broken link" from a post that is thirteen years old, you should probably ask yourself if you've lost the plot. Your job is to generate business today, not spend time asking an analytics blogger to correct a link from a thirteen year old satirical post.

P.S.:  Just thought you'd want to see Chico's home page. Show me the love of merchandise displayed here.

This One Is Missed ... By Everybody

Sure, some clients have a seasonal business (i.e. gardening) that requires different logic. But for everybody else?

I've talked about this concept for nearly twenty years ... and when I analyze your data, it's obvious nobody listens.

Nobody.

Here's an example. The graph below shows the number of newly acquired customers by month.

We see the obvious signature of a company that "doesn't get it". This brand goes for the low-hanging fruit. This brand acquires customers when the fish are biting ... November and December. Low cost of acquisition. Everybody raises a toast to a job well done.

One problem.

It's not a job well done.

Here's a graph of customer value over the next twelve months, by acquisition month.

Customers acquired in December are worth $42.84 in the next twelve months.

Customers acquired in September are worth $58.83 in the next twelve months.

Just as important:

• Twelve-Month Rebuy Rate of Customers Acquired in December = 32.5%.
• Twelve-Month Rebuy Rate of Customers Acquired in September = 39.3%.

I first observed this trend in (checks notes) 1995.

Why does this happen?

When you acquire the customer in September, the customer is "recent" for the highest response months of the year (October, November, December). The customer is likely to convert to a second purchase quickly.

• When you acquire a customer in December, the customer is "recent" during a dormant response period (January / February) ... by the time October/November/December roll around, the customer has lapsed and is less likely to repurchase.

If you want to see if a company is "smart", observe their customer acquisition efforts in September. Are they doing things that seem unusual or run contrary to industry best practices? If so, they've learned the secret to customer acquisition.

P.S.:  If you want to understand why your annual rebuy rate isn't great, check to see if half of your new customers are acquired in November/December. If the answer is "yes", you have a business disconnect ... you are acquiring Christmas buyers then trying to sell them Spring/Summer/Fall stuff ... that's a disconnect.

Do You Measure The Categories New Buyers Purchase From?

Many of the secrets of your business are buried deep in merchandise/marketing reports that simply do not exist. The modern digital world could care less about the products a customer purchases.

You, meanwhile, need to care deeply about what a new buyer purchases, because as it turns out, you are setting your business up for either long-term success or the alternative. Be mindful of what you are doing.

Here are twelve-month rebuy rates for first-time buyers based on the merchandise category the customer bought from in a first order. The categories are dummied-up to protect the innocent.

• Category 01:  36% Rebuy Rate.
• Category 02:  29% Rebuy Rate.
• Category 03:  31% Rebuy Rate.
• Category 04:  27% Rebuy Rate.
• Category 05:  27% Rebuy Rate.
• Category 06:  37% Rebuy Rate.
• Category 07:  32% Rebuy Rate.
• Category 08:  37% Rebuy Rate.
• Category 09:  30% Rebuy Rate.
• Category 10:  33% Rebuy Rate.
• Category 11:  34% Rebuy Rate.
• Category 12:  39% Rebuy Rate.
• Category 13:  35% Rebuy Rate.
• Category 14:  37% Rebuy Rate.
• Category 15:  23% Rebuy Rate.
• Category 16:  28% Rebuy Rate.
• Category 17:  29% Rebuy Rate.
• Category 18:  33% Rebuy Rate.
• Category 19:  40% Rebuy Rate.
• Category 20:  34% Rebuy Rate.
• Category 21:  37% Rebuy Rate.

For this brand, the two most popular categories just turn out to be two categories that attract spectacular customers ... Category 12 and Category 19. In Nordstrom terms, those would be "casual apparel" categories.  Look at Category 15 ... that would be like a Home category (towels, bedding etc). 

One of the valuable lessons I learned back in the early 1990s at Lands' End was that categories that had narrow appeal were terrible categories to acquire customers in. You wanted the new Womens Casual customer because she'd buy Womens Casual and Womens Tailored and Kids and Mens Casual and Mens Tailored and Home. Her long-term value was better because she was pre-disposed to buy from most of our categories. The Home buyer? Nope. The customer had a narrow interest and consequently, low long-term value.

Nobody listened, of course, but it was such a valuable lesson.

This brings me to you. When you are out there paying tolls on Facebook, are you making sure that you attract customers who love your entire assortment (i.e. high-value prospects) or are you just paying for anybody (i.e. low-value prospects)?

You run this analysis for your business, right?

If you don't run it, what stops you from running it?

Yes, I'm building a case toward something ... if you've made it this far, you're one of the smart ones!

How Do You Know It's Working Properly?

About six months ago one of you reached out to me to tell me that you were having "wild success" via a fusion of AI and customer relationship management. The individual said "we don't know what it's doing, we just know that as of today it works."

#reassuring

Then you have Grok going ... well ... nuts on Tuesday (click here - gift link from the NY Times).

You can't through a large language model on LinkedIn without it hitting some pundit who has no mathematical training telling you how wonderful AI is. Sure it is. You don't have to know anything and can have AI do your job. Fun!

When it comes to customer relationship management, and you're trying to squeeze money out of your loyal customer base, please explain to me how exactly you know that the AI you are using "works"? Be specific, especially those of you who don't have mathematical training. How do you know that the customer relationship management decisions that you've outsourced to AI are the "right" decisions? How will you know when your vendor-trained AI solution goes off the rails like Grok did today?

Problem #1 With Digital Marketing

FYI - yesterday's quiz apparently sent some of you to the unsub button. It's not my fault you don't know the answers to the questions ... that's on you!

On to today's topic.

Here's actual data, showing the twelve-month rebuy rate of newly acquired buyers based on how many items were purchased in a first order. Tell me what you observe.

Customers buying just one item have an approximate 30% chance of buying again in the next year.

Customers buying multiple items have ever-increasing chances of buying again in the next year ... nearly a 40% chance for those with three items purchased.

I know, I know, this is the point in the program where you tell me that you have an automated AI-infused cross-sell and up-sell program. Good! Now why the heck does it do such a poor job?

Your AI-infused program might not be doing a bad job. Your source of new customer traffic might be responsible.

For instance, look at these results from recent work:

• New Customers via Catalogs = 43% purchased multiple items in a first order.
• New Customers via Email Marketing = 44% purchased multiple items in a first order.
• New Customers via Google = 33% purchased multiple items in a first order.

Repeatedly, I see instances where the marketer goes for the easy win ... paying Google/Facebook to do the heavy lifting ... those channels are doing heavy lifting ... they're identifying customers who want a specific item at a specific point in time. Those channels have no responsibility to send you a quality prospect, they are responsible for sending you ANY prospect. You don't want ANY prospect.

It's your job to identify prospects who want to buy from your full assortment, both today and in the future.

Do you see the difference? It's an alignment issue ... your marketing efforts are not aligned with subsequent success efforts.

When I measure companies with low long-term value, it's frequently because of the decisions marketers made 1-3 years ago to acquire easy-to-find customers who want an item at a point in time instead of acquiring hard-to-find customers interested in a relationship where they buy from your full assortment multiple times.