Can You Spot The Problem?

Though this seldom happen in actual project work with actual clients, there are times when I receive emails or tweets that share this theme:

• "You seem to oversimplify everything. Business really doesn't come down to new customers and new merchandise."

Well, yeah, it does come down to that.

Marketing experts generally accept that customers have long-term value. If you acquire a customer today, the customer will buy stuff tomorrow ... at ever-decreasing rates of return of course, but future purchases will happen. Future purchases pay for today's acquisition costs.

Very few marketers understand that their marketing performance is directly influenced by the outstanding or unacceptable merchandise performance they have no control over. Maybe your online conversion rates average around 3% and over the past six months they've slumped to 2.7%. Who gets blamed? The marketer! It must be the traffic. The marketer made a mistake.

Often, it's the merchant who messed up - but nobody can see the truth because nobody reports on new merchandise performance. Just as often, the issue is easy to identify and not hard to fix.

Here's our table from yesterday.

Each year there is a new merchandise class. Those items sell for several years before being discontinued and/or sales decline.

Look at each merchandise class.

Can you spot the problem?