Whoop

There it is:  saw this advertised during PGA Golf over the weekend (click here).

With Fitbit you pay for the watch ... an up-front purchase. And yes, they have a premium service. But by and large, you buy a product.

Here you pay $30 a month or some annualized amount that is less than $30 a month, and in exchange you get various analytics that allegedly aid your athletic performance.

Certainly Whoop isn't the first company to offer a subscription service.

From a Customer Development standpoint, subscriptions change repurchase habits. When you buy a Fitbit, you spend $159 or $299 or whatever and then the unit functions for a couple of years. Money is exchanged up-front, repurchase is minimal thereafter until the unit fails or no longer meets the needs of the customer. Meanwhile, subscriptions filter out the customers who are not interested in repurchasing each month. Customers are actively filtered out in ways that a classic e-commerce brand wouldn't dare dream of. But the subset of customers who are left spend $30 a month or whatever. Repurchase rates, if you will, are high.

All of us make choices with our businesses, don't we? Our choices determine how our Customers Develop.

$750

About sixteen years ago we started a program where if a customer spent $750 or more in a year the customer got to pre-select Anniversary Sale merchandise in our Nordstrom stores a week before the sale actually began.

We weren't allowed to create a holdout group.

We weren't allowed to perform a typical A/B test or any other form of experimental design.

We were expected to measure the incremental impact of the decision.

My team performed a reasonably simple analysis. They measured how much the $750+ group spent the year prior, then during Anniversary Sale the year prior. They compared this to how much the $650 - $749 group spent the year prior, then during Anniversary Sale the year prior. The change in performance was "attributed" to the new Anniversary Sale program.

Here's what the analysis looked like:

Anniversary Group:

• 2005 Pre-Spend = $1,500.
• 2005 Anniversary Spend = $300.
• 2006 Pre-Spend = $1,550.
• 2006 Anniversary Spend = $380.

Lower-Spending Group:

• 2005 Pre-Spend = $700.
• 2005 Anniversary Spend = $150.
• 2006 Pre-Spend = $725.
• 2006 Anniversary Spend = $155.

We created an index for the Anniversary Group.

• (380/1550) / (300/1500) = 1.226.

We created an index for the Lower-Spending Group.

• (155/725) / (150/700) = 0.998.

We created a "lift index".

• (1.226 / 0.998) = 1.228.

In other words, the lift during Anniversary Sale among the $750 group was 22.8%.

We multiply $380 by 0.228 and get $86.64. The likely lift in performance was $86.64 per customer.

Then you multiply that increase ... $86.64 ... across say 500,000 participants ... and you get $43,000,000 of incremental sales during the sale.

These obviously aren't the actual numbers, but this is the process we went through.

When you fire off your own loyalty program, you can do something similar if you aren't allowed to execute a controlled experiment. Compare to the group of customers who don't quite qualify and create a handful of indices and see what your analysis tells you. 

Working With Email Buyers, Clickers, and Subscribers

There are several tiers of email customers.

• Those Who Buy Because of Email Marketing.
• Those Who Click Through 2+ Email Campaigns Per Year.
• Those Who Clicked Through 1 Email Campaign Last Year.
• Those Who Clicked Through An Email Campaign 13+ Months Ago.
• Those Who Are Email Subscribers.

The first three segments have a high organic percentage - they don't need other marketing tactics to purchase. You can curtail outbound marketing activities and not lose much in sales.

The last two segments have good organic percentages ... maybe not the 80% seen with the top three segments but quite possibly 55% - 75%. You've already run A/B tests on these customers and know what happens when you execute outbound marketing and when you execute email marketing. The tests tell you what you need to do.

Email marketing has been seemingly around forever. Segmenting email customers has been around just as long. Reducing print expense via outbound email campaigns to responsive email customers is a two-decade-old process that always works.

Evaluating The Segment

In the catalog world we are seeing a "paper panic".

Let's pretend that we have a segment of 10,000 customers.

• The organic percentage (you actively measure this, right?) is 50%. In other words, 50% of what a customer will spend in October has nothing to do with catalog marketing.
• The customer has a 3% chance of buying in October, and will spend $100 if the customer purchases.
• A mailed catalog costs $0.70.
• 35% of sales flow through to profit.

We now know what the segment looks like with/without paper.

• With paper = 0.03 * $100 = $3.00. Profit = $3.00*0.35 - $0.70 = $0.35 profit.
• Without paper = 0.50 * 0.03 * $100 = $1.50. Profit = $1.50*0.35 = $0.53 profit.
• Total profit gain = 10,000 * 0.18 = $1,800.

You will generate MORE profit by NOT mailing this customer a catalog.

Now, in theory you'll also look at what you lose long-term by not converting 150 customers. If you lost $8.00 future profit (i.e. next 12 months) because you didn't convert 150 customers, then you lose 150*8 = $1,200 of future profit.

• Gain $1,800 today.
• Lose $1,200 in the future.
• Net Relationship = Positive.
• Result = Don't mail the segment.

Don't let a crisis go to waste, folks. Wean yourselves off of print where appropriate, invest your advertising dollars elsewhere.

Looking Toward 2022

NOTE: This is the final offer of a $4,900 2022 forecast. Forecasting will become a full-fledged project going forward, likely costing 3x as much as this introductory offer. Please respond by 12:00pm PDT on Wednesday, August 25 if you would like to participate (kevinh@minethatdata.com).

By now, all of you have a forecast for 2022 that looks something like this.

Prior to COVID, this business did $24.7 million, then $25.6 million, then had a bad year and slumped to $23.5 million.

COVID changed everything. Rebuy rates improved, and new/reactivated counts jumped to nearly 105,000, sending Calendar 2020 to a $29.9 million outcome.

But as you already know, business is slumping back to normal. In the past year we see that rebuy rates decreased, spend per repurchaser actually decreased after years of gains, and new/reactivated counts are rapidly in decline after a monster 2020.

This requires us to create a projection for the rest of Calendar 2021. Forecasted customer counts at the end of 2021 lead to a forecast for 2022.

Calendar 2020 was $29.9 million.

Calendar 2021 is forecast to be $26.5 million.

Calendar 2022 is forecast to be $22.8 million.

Forecasts are a direct result of our Customer Development efforts. We had all of those "COVID-buyers". If we didn't do something to nurture and develop them in 2020/2021, our businesses will revert back to historical levels in 2022. It's not the fault of the forecaster. It's not an issue of "bad assumptions". It's an outcome.

Amazon Department Stores

This article appeared in my email inbox and in my Twitter feed numerous times (click here).

Maybe I'm just crabby in the past few days and I'm the problem, but I'm tired of some of the stuff you're told to read from the experts.

There are comments that should cause you to think carefully:

• "Department store sales shrunk from $184 billion in sales in 2010 to $135 billion in 2019, according to Census Bureau data. In 2020, they plunged to $114 billion, according to the Census Bureau."

Those are numbers retail experts don't typically want you to know.

Of course, Amazon isn't opening a "department store", are they? At 30,000 feet, that's not a department store. So the numbers don't really mean anything to what Amazon is specifically doing.

The quote that frustrated me is here:

• "Online is a convenient, efficient channel for repeat purchases, reordering bath tissues, diapers, batteries," said Shankar. "If you really want to build brands, the brick-and-mortar presence is critical."

Is Amazon a brand? They sell more than bath tissue, diapers, and batteries and represent at least 40% of e-commerce.

Is Wayfair a brand?

Is Zappos a brand?

Is Chewy a brand?

Is Newegg a brand?

I don't have to continue or convince you.

There are too many parties right now with a biased interest in getting you to do what they want you to do ... they either benefit financially, or they benefit with credibility. But your business doesn't necessarily benefit from the advice they give or the word salads they offer. This article is a classic one, in that they get quotes from Cohen/Saunders (as so many articles do), and you get the opinions of two people ... all the time.

Do what is right for your business. It is your business. Focus on commerce ... not retail, not e-commerce, not catalogs, not mobile ... sell stuff the way that is right for your customers. Whether that is a 100,000 square foot retail store, a 30,000 foot store, a 6,000 foot store, via Instagram with an influencer, or via paper ... just do what is right for your business and your customer.

Feedback

I received feedback from loyal readers (here's the article I'm referencing). I did not receive any feedback from the vendor community to explain the challenges they face.

A few notes before I move on to more important topics.

Quote:  "I've been told that printers are having a hard time hiring people."

• That might be true. 
• If it is true, then printer/paper Management failed you. In the past half-decade, Lyft/Uber/Amazon/Grubhub/DoorDash among many others busily created jobs that didn't previously exist. If a job is going to pay absolutely nothing, the job better darn well have flexibility that offsets low wages. If you can't offer flexibility, then you hare going to have to pay for talent. I'm tired of the "NOBODY WANTS TO WORK" trope. My goodness, that statement illustrates a profound misunderstanding of how the nature of work changed. Do you want to make $27,000/year as an Uber driver and pick your hours or do you want to do widget quality control on an assembly line for $11/hour?

Quote:  "Nobody can get product, including e-commerce brands. The Global Supply Chain is broken."

• True.
• Now, how does the e-commerce brand deal with this? They have enough merchandise breadth to offset the challenge. If all you sell is paper, then you don't get the benefit of the doubt, because your product line is too narrow. Smart businesses diversify and have a strong contingency planning discipline. Fewer Products = More Risk. You're seeing the "More Risk" side of the equation.

Quote: "How come you didn't jump all over the USPS when they couldn't get a catalog sent to your home last year? Why pick on paper/printing people?"

• Do not get me started.
• If the USPS, paper people, and printers are all struggling to serve you, what are you doing to move on? What does that say about the state of the industry designed to support you?

Quote:  "These are good people, and they're trying hard."

• True!
• You're a good person as well, and you're trying hard. What would happen to you if you couldn't get a list prepared for a future mailing, causing the mailing to be in jeopardy? What would happen to you if you couldn't get your daily email campaign out the door? What would happen to your merge/purge vendor if they couldn't ... you know ... merge/purge?
• We seem to offer more grace to our vendor partners when they have problems than we offer to our own co-workers when they have problems. Why? And this is a 30 year old problem.

Quote: "If we get mad at them, we alienate them. We don't have choices like we used to have."

• You don't have printing/paper choices.
• You have nearly unlimited commerce choices. Why aren't you exploring unlimited commerce choices in greater detail?

Start focusing on commerce. Selling. You are smart, you are talented, you have the tools to build a better future. Start doing that!

Oh Boy

I've written this post a good 20 times and have deleted it 19 times.

About 35% (+/-) of my readers are in the catalog industry. If you would have told them in 1998 that there would be a day when printers would cancel your mailings and paper folks would shut down "following years of market decline" and paper reps would go quiet at the very time when they're needed most ... well, you'd say "what the heck happened"?

What the heck happened?

Catalog marketing peaked in 1998. You might remember 1998 because twenty-five million people would turn on Seinfeld and giggle at the antics of J. Peterman and his catalog. The day Seinfeld ended coincided with the realistic birth of e-commerce. From that point forward, consolidation, mismanagement of the industry, and scarcity were nearly certain. I'm stunned it took 23 years to get here. People thought I was nuts when I said in 2007 that people wouldn't measure results in the future via source codes. I was there, I absorbed the scorn.

The paper folks mocked us, telling us that the Amazon Catalog marked the resurgence of print. We've been mocked for years, as every little failed experiment is lauded as proof of the resurgence of print.

Why would so much consolidation in the print world have happened in the past decade if print was making a resurgence, as the list vendors screamed at us was happening?

Why would catalog circulation have decreased by about 50% over the past fifteen years if print was making a resurgence, as the paper folks screamed at us was happening?

For every million pages Amazon circulated, a billion pages were pulled out of the ecosystem, leaving us with few printing options and few paper options and resulting in a complete failure of the industry this Fall.

Do you understand? Some of you are being told you can't mail a catalog because paper doesn't exist or capacity doesn't exist for your job. Imagine what Boeing would do if they were told they couldn't get engines built? 

What will you do?

I used to receive breathless weekly communications from paper reps, lauding value of print. Those stopped three months ago, as the vendor community that supports the industry realized it was about to lose trust.

Oh, trust has been lost. 

My goodness.

Your co-ops failed you - delivering 72 year old customers with ever-decreasing response rates while selling ... selling ... your data to social organizations and brands looking to "engage" with social commerce users. What used to be a 1.5% response rate is now a 0.5% response rate, and they caused the problem, not you.

Now your printers and paper folks have failed you. And I get it, lots of printer employees are fighting hard for you right now, trying desperately hard to give you solutions. Those people will be viewed kindly, they are wonderful Professionals. The organizations they work for, however, mis-managed things. Ask the Leadership at these vendors why they don't have capacity for your measly little project? It's THEIR JOB to make sure there is capacity for your tiny little job. 

They failed you, or they'd have capacity for you.

I'm going to get industry hate mail after this is published. "You're a moron, you don't get it." And yet, I've been in this industry for more than three decades, and I've never seen something as silly as this. Maybe the negative comments should be directed elsewhere.

Oh boy.

It's time for you to chart a course in 2022. Your focus is on commerce ... not e-commerce, not catalogs, not retail ... commerce. It's time you figured out how to sell stuff on your own. You are talented enough to figure this out. Use 2022 to chart your own course.

It's time.

P.S.: By now you've either decided that there's something to what I'm arguing, or you are ready to fry an egg on my forehead. If you are in the "latter camp", ask yourself what would happen to Shopify if they shut down their application from November 15-22, or shut it down until you paid more to keep your site up (like paying for more expensive paper)? What would you think of that? Your answer to that question applies to the paper reps and printers who are making your life challenging right now.

P.P.S.:  If you disagree with me, let me know, I'll print your response as long as it is worded properly and makes a cogent argument. I will print it without judgment. You get your forum, you get your chance to say something. You deserve to be heard.

P.P.P.S.:  If you agree with me, let me know. I'll only print your response if you want it printed. But please let me know.

P.P.P.P.S.:  I worked at Lands' End from 1990 to 1995. If Gary Comer was told that he couldn't mail his November catalog to the level he wanted to because there wasn't enough paper available and/or not enough printing capacity available ... well ... let's just say that he would have been "cancelled" in modern parlance.

Is There A Long-Term Impact When Prices Increase?

Customer Development is predicated on doing things today to increase customer counts, and those activities result in having a bigger and healthier business tomorrow.

Now, if we take the example from a few days ago ... we increase prices by 10% and see spend/customer increase 10% but see rebuy rates and new/reactivated buyers decrease by 10% ... well ... then ... on the surface, everything should calc out just fine.

For one year, yup.

After that? Nope.

Click on the image to expand it ... you'll see that you eventually have fewer customers and those customers aren't capable of making up the difference, are they?

What happens if price increases every year by 10%?

So that's not optimal.

Now, I get it ... you "have" to raise prices as your costs increase ... you can't absorb the costs, and somebody "has" to absorb the costs, so push 'em on to the customer.

Just realize that there are consequences ... one of those consequences are a shrinking customer file incapable of delivering growth.

And that means you have to combat this situation with a Customer Development strategy that grows customer counts profitably. You can offset what is coming ... you're smart enough and talented enough!

We're Raising Prices!

Maybe you have to raise prices.

Maybe your CFO wants fatter gross margins.

Maybe somebody is holding your merchandise hostage off the coast of China, extorting you to spend $15,000 more to have the shipment arrive in a timely manner.

Regardless, most of the businesses analyzed over the past two years have pretty significant price increases.

On average, there are four things I'm seeing.

1. For every 1% increase in prices, there is a 1% decrease in annual repurchase rate.
2. For every 1% increase in prices, there is a 1% increase in spend per repurchaser.
3. For every 1% increase in prices, there is a 1% decrease in new/reactivated buyers.
4. For every 1% increase in prices, there is a 1% increase in spend per new/reactivated buyer.

As always ... YOUR MILEAGE WILL VARY.

This trend has been masked by the COVID-bump ... when we were in the "free money" days of mid-2020, you couldn't see the trend because new/reactivated counts were trending +50% or whatever your number was.

In 2022, you're going to see the impact of price increases on your customer file. It's going to be harder to develop customers if you keep asking for more money from your customers.

I realize that you "have" to do this.

But you need to realize what the repercussions of your actions are.

The repercussions?

Over time, you will have fewer customers who spend more. Your top-line might flatten out, but your customer file will shrink, requiring more new/reactivated customers to offset future challenges.

And yes, I get it ... you're just trying to figure out how to get "to" 2022, you don't have time to think what happens beyond 2022. Understood. But make sure you have somebody on your team who does care about what happens beyond 2022.

Omnichannel Commercials

It's highly likely that you are watching pickleball tournaments, live, on weekends via streaming.

And while pickleball commercials are deliberately cheesy, they are decidedly omnichannel in nature (not omnichannel via channels, but showing the allegedly humorous inner workings of a company), featuring employees from Jigsaw Health and professional pickleball players.

Warehouse Antics (click here).

Big Lebowski parody (click here).

Product Meetings (click here).

Office Issues (click here).

There are a bunch of 'em (click here) and you'll see 'em all every weekend while watching tournaments.

Why I am sharing this with you?

First of all, everybody in the pickleball world knows the players who are featured - and they have their favorite characters (players). Second, it's the wild west of pickleball and all of the companies outside of Jigsaw Health are growing business on #merchandise that sells to those playing this growing sport.

And third?

I realize you aren't going to do this, but instead of offering a tepid 40% off to get people to buy, you could feature your own employees and your own company and your own omnichannel operational capabilities all at the same time. Yeah, it's gonna require a bit of originality and it isn't like spending $100,000 on Facebook ads.

Marketing is not spending money on channels ... that's an operational role that is easy to do and sounds strategic, but in reality it is a replacement for a lack of creativity.

Marketing is a fusion of strategy and creativity. If you spend money exposing prospects to your creativity, you're operating on a different level. And through your creativity, you can excel at Customer Development!

P.S.:  This is where some of you send me emails telling my why this is a stupid idea, or telling me that you can't do anything creative because you sell widgets and the way you sell widgets is by offering 40% off on Facebook. You might be right. But at least take five minutes and think about what it means if you are wrong, ok? You are smart!!

Bonus Content

Since you like hearing what the experts have to say, give this email marketing article a click.

P.S.: Think about this for a moment ... if you have 100 marketing hours that you and your team spend in a week, how many of the 100 hours are spent on email marketing? Let me know your perspective.

But How Do You Know?

"You don't know what is going to happen in the future, and you don't know how customers will behave. That makes your forecasting work problematic, don't you think?"

Early in my career I noticed that a certain type of person got to sit with the CEO a lot. At Lands' End it was a finance person who sold the forecasting ability of her team to Leadership. At Eddie Bauer there was a guy ... an analyst ... who was darn good at forecasting and always had the ear of Management. My Director eventually brought this individual over to Nordstrom.

I noticed that these individuals were confident. Were their forecasts accurate? Well, they were accurate enough. You get huge gains from making modest changes to forecasting algorithms ... but eventually you have to work terribly hard and you get almost no improvement whatsoever. So the confidence comes from knowing just how much work you have to do to get consistent, solid results.

That confidence comes from trial and error.

If you haven't done the work, it's hard to know how "variable" your results are likely to be. This causes doubt, and doubt leads to the comment you see at the start of this post.

You'll learn that making any guess ... ANY guess ... is better than pondering all of the reasons why your work is likely to be wrong. Those who can, do ... those who can't ... they criticize forecasts.

How do you know when you are doing a good job of forecasting future sales? The biggest thing is this ... people stop nitpicking the details and instead ask thoughtful questions.

Comp Segment Comes Into Play

Three years ago we spent a ton of time talking about Comp Segment and Comp New/Reactivated Analytics. In my Elite Program runs, all clients get to see how the Comp Segment framework impacts where their business is headed, going forward.

When Forecasting 2022, we need the Comp Segment framework to understand just how far off the COVID-bump we've fallen. Fall a long way? Next year's forecast looks dismal.

Let's look at this scenario for July:

• July 2021 = $10.00.
• July 2020 = $12.00.
• July 2019 =   $9.00.

See what happened there?

Productivity in July 2021 is (10/12)-1 = -17% to July 2020. The COVID-bump is ending. However, productivity in July 2021 is (10/9)-1 = +11% to July 2019. The COVID-bump is NOT OVER ... YET. Productivity hasn't slumped to 2019 levels at this time. For next year, we would forecast rebuy/spend levels to (in total) be comparable to 2019 or up to 11% better than 2019. But in no way would we forecast 2020 levels ... those days are over.

This is the scenario I'm seeing lately:

• July 2021 = $10.00.
• July 2020 = $13.00.
• July 2019 = $11.00.

This is trouble.

Productivity is (10/13)-1 = -23% to 2020.

Productivity is (10/11)-1 = -9% to 2019.

In this case, I'd use 2019 as my planning base, and I'd discount it by 9%. And if the trend is getting worse (i.e. -2% then -5% then -9%) I'd forecast maybe -12% to 2019.

Attention Catalogers:  You'll do this on top of paper cost increases and postage increases. You'd forecast a negative productivity situation on top of increasing costs. You know what that means, right? That means you're gonna have to take a hatchet to catalog circulation and then find new ways to drive volume.

Don't have the tools to do this stuff? Contact me now (kevin@minethatdata.com) and for just $4,900 I'll tell you what 2022 holds ... at this time.

But How Do You Know How "Variable" Next Year Will Be?

"How do you know what will happen?"

That's how some of the interactions start on LinkedIn. Good question!

I have no idea what will happen.

Here's what I do have:

• I know what happened the past four years. I know average rebuy rates, average spend per repurchaser (and spend per new/reactivated buyer for that matter).
• I also know "how variable" those results were. If the results were unstable, future predictions will be less certain.

Here's data from a business. Look at the average and standard deviation outcomes.

Two standard deviations tell us how much our estimates might vary (95% of the time). Rebuy rates can vary between +/- 2.6%. Spend per Repurchaser can vary by +/- $11.98 (95% of the time).

Once we guess what the rebuy rate is likely to be ... once we guess what spend per repurchaser is likely to be ... then we apply the variability we've seen over the past four years and we have a forecast.

Tomorrow we'll talk about setting repurchase rates and spending levels ... something you care about.

When you need help with a quick forecasting project, give me a holler ($4,900 ... kevinh@minethatdata.com) and we'll get started.

Variability Associated With Forecasts

I ran a forecast for this business, remember?

So yeah, my prediction of $25.1 million is likely to frighten the CEO ... she's not gonna like seeing her business revert back to 2019 levels (with some gain due to file power).

Yeah, she's gonna ask me how confident I am in the $25.1 million estimate? She's gonna be worried about inventory commitments. She's gonna be worried that she can't take $25.1 million to her Board or to her Owner because they'll crucify her ("are you kidding me? You did more than thirty million for two years in a row"). Being crucified is probably her biggest concern. I know I'd have a hard time selling the likely outcome above to ANYBODY, much less to a Board/Owner.

Each forecast has variability tied to it. I'm making five guesses ... number of buyers, rebuy rate, spend per repurchaser, new/reactivated buyers, spend per new/reactivated buyer.

Therefore, I ran an algorithm that simulated 100,000 outcomes. Each outcome varies the five guesses above (via a normal distribution). Then I produce 100,000 forecasts. Yeah, one hundred thousand. Hard to argue with that many outcomes.

The result of one hundred thousand forecasts?

That's fun stuff!

To simplify the outcome, I broke the outcome down into deciles.

• 10% = < $23.3 million.
• 20% = $24.0 million.
• 30% = $24.4 million.
• 40% = $24.8 million.
• 50% = $25.1 million.
• 60% = $25.5 million.
• 70% = $25.8 million.
• 80% = $26.3 million.
• 90% = $26.9 million.

Realistically, there's an 80% chance that my forecast will yield a result between $23.3 million and $26.9 million.

You saw my guesses above. If the CEO doesn't like the guesses, we can plug in different guesses and get different outcomes. But as always, we're dealing with guesses. Your expertise at guessing determines the outcome, and the outcome is likely to vary by +/- $1.8 million (80% of the time ... varies by +/- $2.8 million 95% of the time).

Even with the variability, the business isn't forecast to be > $30,000,000. That's likely to be the sticking point here ... even if we change our guesses, we're still likely to end up with a forecast < $30,000,000 ... the COVID-bump is over and the business is settling back into a "new normal".

That's the discussion we need to have.

Ok - you are likely struggling to come up with a top-line estimate for 2022. For $4,900 I'll run my algorithm on your business and we'll simulate 100,000 outcomes and see where we end up. Sound good? Contact me (kevinh@minethatdata.com) and we'll get busy.

What Does The Forecast Look Like?

Recall our comp segment and comp new/reactivated buyer metrics:

• Comp Segment Performance July 2021 = $10.15.
• Comp Segment Performance July 2020 = $11.88.
• Comp Segment Performance July 2019 = $10.06.

And here is the view for new + reactivated buyers:

• Comp New/Reactivated July 2021 = 15,500.
• Comp New/Reactivated July 2020 = 28,300.
• Comp New/Reactivated July 2019 = 17,200.

Using this information, I produced a forecast for the rest of 2021 and for 2022. We can compare to the COVID year of 2020 and the last "normal" year, 2019:

The secret here is to forecast rebuy rates and spend/rebuyer metrics, and then to forecast new/reactivated buyers to the best of our knowledge.

Given what we're seeing with our comp segment and comp new/reactivated buyer counts, I forecasted the rest of 2021 and all of 2022.

Tell me what you observe?

You see a business that loses the COVID-bump ... settles back toward "normal", and is entirely normal by 2022 with a $2.1 million bump in sales caused by having decent file power improvements caused by COVID.

In the next post I'll show you a range of "alternatives".

Email me (kevinh@minethatdata.com) if you'd like me to forecast where your business is headed in 2022 ... $4,900 per run.

Forecasting Calendar 2022

Undoubtedly you are struggling with forecasting what your top-line looks like in 2022. Did the COVID-bump end? Will performance slump back to 2019 levels, or will there be some gain that can be leveraged in 2022?

You likely already know the answer. You've looked at your comp segment performance, comparing it to 2020 and to 2019. You know what happened to new + reactivated buyer counts vs. 2020 and vs. 2019. This tells you what is coming.

Let's look at a very simple example, based on what happened in July.

• Comp Segment Performance July 2021 = $10.15.
• Comp Segment Performance July 2020 = $11.88.
• Comp Segment Performance July 2019 = $10.06.

And here is the view for new + reactivated buyers:

• Comp New/Reactivated July 2021 = 15,500.
• Comp New/Reactivated July 2020 = 28,300.
• Comp New/Reactivated July 2019 = 17,200.

We already know the story for 2022 "if" things continue as they have in July 2021.

• Existing buyer performance is about the same as two years ago (pre-COVID).
• New/Reactivated buyer performance is about -10% to two years ago (pre-COVID).

The business would contract compared to 2019 without file growth, given these figures. COVID file growth will likely carry the business into next year, helping the business squeak out small growth levels.

We'll talk more about this over the next several days.

But between comp segment numbers and comp new/reactivated figures, you likely already know what 2022 looks like.