January 16, 2012

Flash Sales: Transformationals

A lot of folks have a lot of interesting ideas for you.

One of the trendy topics is "flash sales".  You know the routine.  You either sign up via email, you sign up for the opportunity to sign up at a later date, or you are invited by a friend to participate.

Gilt Group is one such company, boasting something like a half-billion dollars in annual sales.

That's zero to a half-billion in a few years.  Given that the economy isn't growing much, that demand came from other businesses, right?

Sign up for one of these businesses, and they'll take care of you.  Sure, you might get a designer handbag that retails for $399 for just $199.  Even better, you refer a friend, and you may get $25 off your next order.

There you are, helping out with the "two-step" process.  The goal is to grow a prospect file, then the flash brand has to find great merchandise and great deals, converting the prospect into a customer.  Once a customer purchases, the goal is to "engage" that customer to the point where the customer can't help but purchase multiple times a year.  This is the customer that needs to see the new series of deals at 11:00am.  This is the customer that has to use a mobile device, because she sure isn't sitting in front of a desktop computer at home at 11:00am.  This is a customer that is incented to spread the word, via email, via Facebook, via Twitter.

She is a "Transformational" customer.  Just read the text in the link ... she's a 26-45 year old woman (the "sweet spot", as it says).

If you market to a 55+ rural woman, well, this world is seemingly unthinkable.  You rent names, you pay Google for clicks.  Your customer isn't going to help you grow an email prospect list, even if you give your customer $25, and you wouldn't give your customer $25 because the math doesn't work, does it?  

Your first thought is to pay for customers that will pay you back, purchasing full price merchandise.  The flash site's first thought is to recruit prospects and temp them with an endless array of discounts.

Completely different business models.

Completely different customers.

You're not going to entice the Gilt Groupe buyer with eighteen catalogs a year.

You're not going to entice the 2012 catalog buyer with special discounts at 11:00am.

We can measure how willing our customer base is to make the transition from a classic shopper to a Transformational shopper.  This style of measurement helps us understand how far we can take our businesses away from classic channels.  And mind you, there's nothing wrong with classic channels (like catalog, or now, e-commerce).  But we should know how willing our customers are to try new channels, shouldn't we?

1 comment:

  1. In a study tracking the profitability of more than 200 Fortune 500 companies over 19 years, Adler found that the 25 firms that most aggressively promoted women to executive positions had 34 percent higher profits as a share of revenue than the industry median.


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