October 15, 2017

Hillstrom's Optimizer: But We're Taught To Optimize!!

Here's our base case:

I ran a scenario where I fully optimized the business for profit in Year 1.
  • 0-12 Month Catalogs = +60%.
  • 13+ Month Catalogs = -40%.
  • Acquisition Catalogs = -35%.
  • Email = +100%.
  • Search = -10%.
  • Online Marketing = +60%.
  • Radio / TV = -70%.
Here's our base case:
  • Sales = $115.5 million.
  • Profit = $9.2 million.
But with the "optimized" solution, here's what we have to show for ourselves.

  • Sales = $114.6 million.
  • Profit = $11.9 million.
The business is about a million dollars smaller, but profit is $2.7 million dollars better.

Tomorrow, I'll run through an example where we optimize every year out through year five. What do you think will happen? I mean, we've been taught to optimize the business, right?!

P.S.:  Omnichannel experts told us that we'd integrate all our channels and experience riches. The opposite happened. And now Spirit Halloween is filling the void (click here).

P.P.S.:  Conrad forwards us this beauty about Columbus, Ohio ... a retail experimentation market (click here). Hey readers in New England ... what would stop you from creating your own version of this?

P.P.P.S.:  When you experiment, you move toward the future. This is what you leave (click here).

P.P.P.P.S.:  When I offer the links at the bottom of a post, I compare how you click on the articles vs. the tables offered in the post. You already know which slice of content you prefer, don't you? So then I look at the links you click on the most, because that tells me what you "think" is important/interesting to your business. This is the most popular link of the past two months (click here) ... with nearly 10x as many clicks as the average link. It says something about the state of this industry.

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