Think about it this way. A football team drafts players, and those players are not great players, so the football team goes 5-11 for a few years. What happens? The coach is fired. The General Manager responsible for the awful outcome is fired. The new coach and GM have to live with these players for a few years until they can turn over the roster.
Like the NY Jets, right?
The same thing happens in e-commerce. We acquire customers, and then we're stuck with those customers for a few years. If those customers don't perform, if they cannot be Developed, then the marketer or analytics expert or e-commerce executive is fired.
So why would you knowingly acquire customers who you know won't repurchase again? To generate short-term profit? Sure, go ahead. But that doesn't allow your company to achieve lofty goals, does it?
This is actual data from a brand. Here are annual rebuy rates for customers acquired via various channels.
- Website Unsourced = 25%.
- Paid Search = 27%.
- Catalog = 27%.
- Email = 27%.
- Retail Store = 34%.
- Online Events = 23%.
- Customer Service Associate = 12%.
- Social Media = 19%.