This happened seven or eight years ago. You've likely been in the same situation. I'm sitting in the Executive Conference room at a nine-figure brand. Everybody enjoyed (to some extent) their box lunch. After a morning of presentations, it was time to get down to business.
This brand had customers who repurchased at a 34% rate (in other words, of all customers who bought during 2015 just 34% bought again in 2016). And the rate had gotten worse and worse over the past five years.
How does Management fix this business?
Well, the CEO had ideas. He starts yelling "WE SIMPLY HAVE TO FIGURE OUT HOW TO GET CUSTOMERS TO BE MORE LOYAL, THAT SOVLES EVERYTHING".
The CEO looks to me, knowing what I'm going to say.
- "What do you think?"
- "Stop cutting back marketing spend on customer acquisition and start focusing on what your business is, not what you want it to be. You are in the business of finding new customers on a continual basis."
- "You have been CEO for six years. You have tried everything you and your team can possibly think of to increase repurchase rates. If the answer was sitting in this room, wouldn't the answer have appeared before today? You already know the answer to your question."