If I index rolling-twelve-month demand, using September 2019 as a base, this is kind of what I'm seeing.
At Month = 7 (March 2020), sales begin to accelerate ... growing about 30% within a year. From there, sales stagnate, and by Q4/2021 sales begin to slump.
We're now in the slumping phase.
Worse, sales look like that ... but customer counts are awful. Here's something I commonly observe.
- Sales vs. September 2019 = +23%.
- Prices vs. September 2019 = +30%.
- Total Customers vs. September 2019 = -7%.
- New/Reactivated Customers vs. September 2019 = - 15%.
It wasn't an awful thing to trade customers for higher prices in 2021 because there were a glut of customers from the COVID-bump.
It's become an awful thing to trade customers for higher prices in 2022 because there is no longer a glut of customers from the COVID-bump. We're consciously trading new/reactivated customers off for sales gains via higher prices (and I get it ... your cost of goods went up so you feel like you have no choice). We're consciously trading rebuy rates for sales gains via higher prices.
What happens in 2023?
You're already struggling to acquire customers. That continues. You'll continue to feel inflationary pressure, so you'll likely continue to increase prices. This will cause you to continue to lose customers. The more customers you lose in 2022/2023, the harder it will be to be successful in 2024 and beyond.
You will have to find a way to appeal to prospects, even with higher prices. This will take real marketing chops, not the color-by-numbers channel-based conversion-rate ROAS fluff you've learned to analyze via Google Analytics. Real. Marketing. Chops.
It's time to truly test your skills.
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