March 02, 2022

Soldouts / Cancels / Returns

You've probably analyzed the living daylights out of this issue ... and if you haven't, you must not have any business issues.

On a recent Zoom the Executive (who clearly hadn't researched the issue) said the following to me.
  • "I just hate disappointing the customer when we don't have a product available. It has to really hurt our brand, don't you think?"

Well, the answer is "probably not".

Here's what you'll commonly observe.
  • Rebuy Rate of customer where order is 100% perfect:  40%.
  • Rebuy Rate of customer where 1 items is soldout / cancelled / returned = 43%.
  • Rebuy Rate of customer where entire order is soldout / cancelled / returned = 33%.

Your customers are remarkably patient with you. As long as the entire order isn't nuked, your customers understand the process and move forward ... often with higher rebuy rates in the future.

Control for customer history and then look at future activity ... you'll see that your customers tolerate some level of returns, and they tolerate some level of poor product availability. They don't tolerate extreme situations.

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