July 02, 2018

What Is The "Right" Investment Window?

There are six sub-tables in the table displayed here.


The first sub-table shows you how much profit you generate per year by acquiring customers at a PPNC (profit per new customer) of +$10. This is a no-brainer, isn't it?

The second sub-table shows you how much profit you generate per year by acquiring customers at a PPNC of $0. This is a no-brainer, isn't it?

The third sub-table shows you how much profit you generate per year by acquiring customers at a PPNC of -$10. You lose money acquiring the customer, then you generate profit thereafter. This is also a no-brainer, you generate enough money within a year to offset the loss and still make money. Most of my client base is willing to do this.

The fourth sub-table shows you how much profit you generate per year by acquiring customers at a PPNC of -$20. You lose money acquiring the customer, you break-even after a year, and then you make money in subsequent years. Most of my client base is willing to do this.

The fifth sub-table shows you how much profit you generate per year by acquiring customers at a PPNC of -$30. You lose money acquiring the customer, you do not make up the loss within a year, and then you make money in following years. Most of my client base is UNWILLING to do this.

Look at the sixth sub-table, at the bottom of the image.

When you sum all profit, you learn that the best thing for long-term health is to lose a ton of money acquiring customers. After five years, you make an additional $5.5 million by acquiring customers at a loss of $30. In order to do this, you have to sub-optimize your business today ... you'll lose more money this year in order to make a ton of money long-term.

This is the "Amazon" strategy ... losing money forever or breaking-even forever and then all of a sudden you own the world and everybody is stunned into silence.

You run these scenarios with your business, right?

RIGHT?

You have no choice but to run these scenarios for your business.

When you come back from the July 4 holiday, be sure to run the scenarios and find out what the best strategy is for your business, ok?

Omnichannel Customers Are The Best Customers

Omnichannel customers may well be the best customers. But that doesn't mean that the omnichannel thesis caused customers to become be...