April 06, 2021

The Master Sheet: What Is This Company Doing Well?

Let's start with the Master Sheet.

What is this company doing well? Let's look at the areas in the middle heatmap of the table that are colored green? There's an obvious column that is colored green. First-time buyers beyond about 9-10 months of recency index high. In other words, this company does an outstanding job of Developing lapsed first-time buyers.

To be honest, this is a common outcome for brands that still employ catalog marketing. Catalogs are (expensive and potentially unprofitable) fabulous tools for increasing Customer Development, especially among lapsed buyers.

Keep looking at 1x Rebuy Index column. What do you see in months 1/2/3 for first-time buyers? You see an indexed value < 1.000. This company is about 20% worse at Welcome Programs than my baseline suggests this company should be. That's a bad outcome. This company needs a better Welcome Program, or simply needs a Welcome Program, period.

Look at the column next to the 1x Rebuy column, labeled "Change 2x vs 1x". This column is the indexed outcome of comparing how response increases as a customer purchases for a second time. What color are the cells? They're largely orange, meaning that this brand is about 10% to 15% less effective at increasing response among second-time buyers than my baseline. This brand does not do a good job of Developing customers who purchased for a second time.

What colors do you see for customers who purchased for a 3rd/4th/5th time? Most of those cells are yellow, meaning that this company does an average job of Developing customers through Emergence and into Loyalty.

What grade would I give if I had to evaluate this brand? Probably a C+. The brand does a lousy job of managing the Welcome period, it does an exceptional job of Developing Lapsed first-time buyers, it does a below-average job of developing second-time buyers, and it does an average job of pushing customers through Emergence into Loyalty.

What would you do to fix this outcome?

Think about that question for the next day, ok?

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