September 28, 2021

Stop Emailing Customers Who Consistently Return A Lot Of Merchandise

Some of the omnichannel folks love it when a customer returns something. "It's another touchpoint, another chance to surprise and delight the customer!!"

Alright.

Profit, folks.

Profit is what you need to be looking at.

If you have a loyal email buyer, that buyer spends 40%(ish) of what they buy via email marketing (often it's 75%, especially if you don't have a print channel which most brands don't have). And if the customer returns 60% of what the customer bought previously, the customer is likely to return 50% (or more) of what the customer buys in the future.

Here's an example.

  • Email buyer expected to spend $120 in the next year, $60 via email marketing (gross demand before returns).
  • Average price of an item = $30.
  • Expected return rate = 50%.
  • Cost to process a return = $10 per item.
  • 30% of sales flow-through to profit.
Future Email Marketing Profit = $30*0.30 - $10 (for one item returned) = Loss of $1.

Now, if you don't email this customer (or email them 2x a month instead of 2x a day), you put money in your pocket.

Stop emailing customers who consistently return a lot of merchandise, ok? It's not hard to do. Perform the math and get busy generating more profit.

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