January 13, 2022

Why Not Cater To All Active Customers?

Yesterday we looked at a business that was stuck.

Then we tried to improve loyalty among the best customers. The long-term problem was not solved.

So now the retention advocate might argue that we can get "all" twelve-month buyers to be more responsive. Sure! Though I'd ask a simple question ... "if you could do that, wouldn't you have already done that?"

That's the problem with retention/loyalty experts. If they had solutions, they'd have already implemented the solutions. It's terribly hard to move the needle.

So let's assume we can increase rebuy rates by 3% ... moving the rate from about 29.8% to 30.6%. That's really hard to do, by the way.

What happens to the health of the file over the next five years?

The business is still stuck, isn't it?

We haven't solved the problem.

What does it take to "unstick" the business? How about a 15% increase in rebuy rates?

Alright! The business is "unstuck". You have a 60% increase in loyal buyers after five years. Rebuy rates went from 29.8% to 34.2%, and actually creep up to 35.6% as the top of the customer file is ultimately replenished. Sales go from $21.6 million to $29.4 million.

So yes, you can cater to all active customers, and you "can" fix the trajectory of your brand.

One problem.

If you could do this, you'd have already done it. Nothing is stopping you from improving retention, except possibly the amount you spend on marketing to your existing twelve-month buyer file.

We'll finish this topic on Monday.

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