Last week I posted a quiz question on Twitter (click here to see it). I presented a fabulous customer (from a demand standpoint), but the customer returns 80% of the merchandise the customer purchases, rendering the customer unprofitable. I asked the audience whether the email marketer should continue to send email campaigns to this customer?
48% of those who responded said YES, keep emailing the customer even though the customer returned $800 of $1,000 purchased, causing the customer to become unprofitable.
I asked readers WHY they would keep marketing to the customer?
One reader suggested that email marketing is no place for a brand to focus on an individual customer. What?
A second reader said analyzing returns was fun for "geeks" but without Executive buy-in it represented pointless research. I'm sorry for being a "geek", folks. I just want you to be more profitable.
Another reader said that returns are the fault of the brand, and are not the fault of the customer. In other words, the brand messed up, causing the customer to return the merchandise. How does a brand mess up so badly that 80% of what the customer wanted is returned for a refund? It's pretty much impossible, isn't it?
Let's say your company return rate is 20%. How far above 20% is the "brand" responsible for, and how far above 20% must the individual customer return rate be before it is the fault of the customer?
Let the data decide for you. Anytime the customer is "predicted" to return 60%+ of merchandise after "x" purchases you have a problem customer ... it "is" the fault of the customer.
There is no rule that says you must market to customers who return too much merchandise. None. Not one.
You can let the high returns customer buy from you and mess with your p&l all you want ... but don't force the customer to buy anything. No emails. No print. No Friends-And-Family events. None of it. Your job is to protect your p&l. Protect it!