Those who lived through the transition from traditional direct marketing to e-commerce knew a simple fact:
- E-commerce passed the "eyeball test".
So take a look at your sales trends by year. Just give the sales trends a simple eyeball test. Here's data for a company we're going to analyze in this series:
- Telephone Demand: 2008 = $7.5 million. 2009 = $6.0 million. 2010 = $5.6 million.
- Online Channel: 2008 = $12.0 million. 2009 = $10.8 million. 2010 = $11.0 million.
- E-Mail Channel: 2008 = $4.5 million. 2009 = $4.2 million. 2010 = $5.2 million.
- Search Channel: 2008 = $2.1 million. 2009 = $2.2 million. 2010 = $2.5 million.
- Social Channel: 2008 = $0.4 million. 2009 = $0.6 million. 2010 = $0.9 million.
- Mobile Channel: 2008 = $0.1 million. 2009 = $0.5 million. 2010 = $1.3 million.
Now it is time for the eyeball test.
Look at Social. Social is growing, but is not exhibiting exponential growth. Social, in this example, does not pass the eyeball test. It's maybe 4% of sales today, and it's hard to see a scenario where it could be 20% of sales in two years.
Look at Mobile. Mobile is experiencing exponential growth. Mobile passes the eyeball test. Mobile could easily generate $6.0 million two years from now, $12.0 million four years from now. Or not. But it certainly passes the eyeball test.
If you are dabbling in Mobile, run a rolling-twelve-month demand analysis ... is growth exponential, linear, or non-existent? Channels that will cause a fundamental shift in customer behavior start slow, but tend to exhibit exponential growth.
Tomorrow, we analyze new vs. existing customers.