April 14, 2015

But A Recent Buyer Is A Good Buyer, Right?

For the most part, a recent buyer is a good buyer ... right?

Let's take a second look at the grid from last Friday.

This table measures direct-channel value for a business that has retail stores and an e-commerce website. So read down the 7-12 month direct recency column ... if the customer has never purchased from retail, the customer is worth $42.66 demand to the direct channel. But now, the customer (surprisingly) walks into the store and buys something. Everybody is happy! Everybody, that is, except for those who manage the website.


The value of the customer to the website went up, quite a bit, from $42.66 to $85.97. But the customer is nowhere near as valuable as a recent online buyer (between $141.77 and $303.42).

I know, I know, the omnichannel experts will tell you that this doesn't matter.

It matters if it is your job to forecast online sales, right?

It matters if it is your job to forecast online inventory, right?

It matters if it is your job to forecast online traffic, right?

The omnichannel movement is sweeping vital business details under the carpet. Omnichannel advocates don't care where the customer buys.

Your CFO cares deeply where the customer purchases ... where the customer purchases dictates future sales, and future sales require staffing and inventory and proper forecasting techniques ... and ... they require proper triggers/targeting strategies. In this case, the customer just bought from the store ... why send emails demanding that the customer take advantage of a free shipping offer when the customer just bought from a store?

Our future includes a full incorporation of purchases across all channels ... we encourage the customer to purchase anywhere ... but we react VERY DIFFERENTLY when the customer buys from a specific channel. The omnichannel thesis of "do everything digital" simply makes no sense in a world where we can clearly see how the customer will behave in the future.

Send me an email (kevinh@minethatdata.com) if you need assistance with grids and triggers.

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