February 17, 2021

How Do I Know If I Have A Customer Development Problem?

For one thing, you look at annual repurchase rates. They're generally low, and that tells you that you have a Customer Development problem.

Your repurchase rates might be more than acceptable, but all of your marketing is generic, the same to every customer. That's a problem.

If your customer ages one year for every year that passes, you have a Customer Development problem.

If you have a low annual repurchase rate and a high number of skus, you have a Customer Development problem.

If you have a highly seasonal business where 40% of sales happen in November/December, you have a Customer Development problem.

If customers are purchasing via paid search in a 10th order from your brand, you have a Customer Development problem.

If email marketing isn't responsible for a minimum of 20% of your online sales, you have a Customer Development problem.

If you aren't generating at least $0.20 per email delivered, you have a Customer Development problem.

If you don't do something unique and personalized to motivate a first-time buyer to purchase for a second time quickly, you have a Customer Development problem.

If a customer is highly responsive at recency of 11/12/13 months (due to strong seasonality), and you aren't priming the pump to recognize this behavior at a customer level and then act upon it, you have a Customer Development problem.

If a customer has purchased five times and all purchases are from one merchandise category, you have a Customer Development problem.

If a customer is offered a promotion, purchases at 30% off, and then continues to buy only when promotions are offered, you have a Customer Development problem.

If a customer buys in stores and is marketed to via email and is constantly offered messaging that demands the customer buy online right now and the customer listens and buys online and greatly slows in-store purchases, you have a Customer Development problem.

I could go on. But now you know what you should start looking at in your data/practices.

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