Now, please take this infographic with a grain of salt ... there's a lot of theory and unsubstantiated numerical wizardry going on here ... click here for the article/chart.
The point isn't to argue or defend the chart ... the point is to get us to think about low-cost customer acquisition.
As catalogers, we cling to high-cost customer acquisition. We love to pay co-ops and Google money for new customers. It's easy. It's predictable. It scales ... we can hire one person to acquire new customers via co-ops and search ... one person!
A lot of what we're going to be asked to do in the future is like the old-school, two-step programs. Remember those? We'd advertise with a blow-in, allowing the customer to request a catalog ... this request got the customer on our customer file, where we'd market to the customer in the future.
Our future includes a lot of "two-step" activity ... using social/mobile as a "prospect list", eventually converting prospects into buyers, with luck. At first, this won't appear to "scale", it will seem like a lot of work for very little payback.
It sure seems like we're headed in that direction though, doesn't it?
RFM is great for targeting one catalog to one customer. However, RFM is tough to manage in a multichannel environment. This becomes clear ...
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It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...