Mailbag

As always, these are real questions from fake individuals:

Question:  Our online business has maximized email marketing and search marketing.  Our CEO demands that we grow.  How do we do that?  Tom, Tulsa, OK.

• I get a lot of questions similar to this one.  If I had the answer, I'd tell all of you, and all of your businesses would grow and thrive.  I will tell you this ... most businesses stop growing, not because customers suddenly lose loyalty, but instead, because customer acquisition dries up.  Run simple "State of the Housefile" reports (online wonks call these "dashboards") that show you how your customer acquisition activities stack-up against the number of new customers you have to have to cause your business to grow.
• I repeatedly ask Marketing Executives the following question ... "What is your customer acquisition / awareness program?"  Not a lot of people have an answer to this questions, especially among businesses that are stuck right now.

Question:  If the USPS goes to three day delivery, or if they really ramp-up the costs on catalogers, it's pretty much lights-out for catalogers, right?  Tina, Flagstaff, AZ.

• No, it is not lights out.
• It is, however, the wake-up call that our industry conveniently ignored for at least six or seven years.
• You have at least four high-level customer segments in your database.  You have the 55+ rural audience that shops via mail/phone.  Catalogers will struggle here as costs escalate.  You have those who respond online after receiving a catalog ... you can cut back a bit here.  You have online shoppers (email, search), that won't be impacted much.  And you have customers who love your brand, plain and simple. These customers won't be impacted at all.
• Yes, I'm getting a lot of requests to identify customers as being in one of these four segments ... contact me here for your project.

Question:  Why are you so against Facebook marketing?  Fifteen years ago, online marketing was sweeping the world, and the pundits were against it.  Now you're against Facebook marketing.  Maybe you are too old-school now?  Cheri, Atlanta, GA.

• I am not against Facebook.
• I am against vapid marketing hype by those who have a self-serving agenda that requires promotion of "f-commerce".
• Take your average retail brand ... for every $1,000 they generate in-store, they generate around $100 online, and around $1 via Facebook.  That's not breathtaking performance, is it?
• E-commerce was shot out of a cannon ... now, sure, most of the sales were cannibalized from existing channels, but that doesn't matter, it was self-evident that e-commerce was going to change the world.
• Facebook ... not so much.  Sales haven't taken off like they were "shot out of a cannon".
• Should you be there?  If your customer is there and transacts there, then sure!  If you want to experiment with new marketing channels, yes, then be there!

Question:  Is mobile relevant to modern catalogers?  Skip, Louisville, KY.

• No, and yes.
• Say you are Cuddledown of Maine.  A 57 year old woman living in Upstate New York may not have a need for instant information for a bed bug proof pillow, so your website or mobile-optimized website may be good enough.
• More important is the following question ... "what is your mobile marketing plan?"  In other words, you might cater to a 55+ rural audience, but is that the audience you want to cater to?  If you want to cater to a younger/mobile audience, are you willing to make the investments required to do this?  When you have an audience disconnect, it takes a long time to move the needle in a new channel.

Question:  What is the most important metric that you track, Kevin?  Bailey, Cincinnati, OH.

• There are numerous metrics I track.  There are two that work together, ultimately dictating a large share of the success of a business ... metric #1 = Number of new buyers in past twelve months ... metric #2 = Profit per new buyer, past twelve months.  By combining metrics, you learn a ton about why your business is successful.  If there was a third metric worth tracking, it would be the twelve-month repurchase rate.

Question:  Why don't you put a lot of stock in conversion analytics?  Ralph, Rochester, NY. 

• I don't have any problem with web analytics.
• I have a problem with metrics that do not correlate with annual customer performance.  Conversion Rate is one of those metrics.  Think about all the work your team does to increase conversion rates.  Then think about what has happened to new customer counts, and to your annual retention rates over the past decade!  Conversion is important, but it does not measure customer relationships.  We shouldn't care if a customer visits your website six times before purchasing ... that's still a conversion ... yet we demand that the customer buys in the first visit.
• Focus on annual retention rates and new customer counts.