May 05, 2021

Some Channels Yield Really, Really Lousy Customers

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%.
In this case, when a customer has a question and doesn't necessarily trust the item the customer is purchasing, the customer speaks with a Customer Service Associate. Those customers don't come back.

Neither do the customers who buy via Social Media (in this case ... in other project, holy cow, those Instagram-sourced buyers are fabulous).

Store customers, however, are most likely to repurchase (in this case).

Your mileage will vary.

But the need to perform this style of analysis is undeniable. Some channels yield really, really lousy customers.

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