July 17, 2017

Aligning Resources

Let's pretend that your annual repurchase rate is 30%.

If true, then your marketing resources need to be aligned squarely against the singular goal of finding new customers, correct? I mean, you have to replace 70 of 100 customers every single year, what other conclusion could you come to?

Most of my client base possesses an annual repurchase rate under 40% - it's the general nature of catalog marketing and/or e-commerce (retail is different, with higher annual repurchase rates). So most of my client base (and most of my readers) are likely to fall into a situation where finding new customers is easily the most important initiative.

At conferences, I'll ask how much time the audience spends trying to get more customers to become more loyal ... and I'll frequently see that the majority of attendees spend the majority of their time trying to get the majority of existing customers to spend more money.

In other words, resources are not aligned properly.

When I speak of low-cost / no-cost customer acquisition programs, loyalty-driven employees stare like I've got green steam coming out of my ears. There's a good reason for this ... loyalty-driven employees have spent a career honing loyalty-driven skills.

As we look to 2018, one might consider if we're aligning resources properly? Frequently, the answer is no.

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