The "comp segment analysis" is one of the two big pieces in my business system. Here, I get to quickly diagnose what is happening to a business.
In this comp segment analysis, I analyze customers with exactly two in-store purchases and no other purchases in the past year. In other words, these are customers who are most likely to appreciate the in-store experience. If they are spending less in retail, then something is wrong.
The table shows us that something is wrong ... in stores.
I'm measuring subsequent twelve-month spend. First, look down the "Total" column. Retail customers are just as productive today as they were four years ago ... in fact, productivity increases at just under one percent per year. So retail buyers are not spending less ... in fact, they are spending more.
But look at the "Online" and "In-Store" columns. Retail buyers are spending twice as much online today as they were spending back in 2010. Clearly, retail customers are making a shift online. Now look down the "In-Store" column. Spend has declined, in each of the past three years. Oh oh.
The comp segment analysis quickly identifies the problem. Retail buyers are finding the e-commerce experience more desirable, and are shifting their spend online. This "system" quickly cuts through the problem ... the problem isn't customers, the problem is channels. We can immediately begin to think about the ramifications of a customer that may, in five years, spend $30 online and $65 in-store ... and we can think about what that means for the retail experience when too few customers are actually setting foot in a store.
I know, you've heard me talk about comp segment analysis for the past three years. Since I keep getting hired to run the analysis, it tells me you are choosing not to run the analysis. Run it!! Learn what is really happening with your business.
RFM is great for targeting one catalog to one customer. However, RFM is tough to manage in a multichannel environment. This becomes clear ...
If you don't like geeky math, please skip this post, because I am about to show you how the sausage is made! I have eight variables in...
It's common for folks to measure cost per new customer. Total Marketing Cost = $10,000. Total New Customers = 130. Cost per New C...