April 09, 2023

Investing Marketing Dollars

All sorts of things impact your marketing investment in customers ... you already know this.

But we should also talk about some of the things we don't always consider.

In Category Development work, we know that customers acquired in some categories clearly outperform customers acquired in other categories in the future.

In this example, the "good" category brings in fewer customers for the same ad cost, but delivers customers with higher rebuy rates and higher spend per repurchaser metrics.

As a consequence, when comparing acquisition profit and subsequent twelve-month profit, this brand is better off acquiring customers from the "good category" - the brand nets six (6) fewer customers at a profit (loss) per new customer that is nearly four dollars worse ... however, after acquisition the "good category" delivers customers worth $6 more in the next year.

The tradeoff is obviously worth it!

Know which categories deliver customers with good future value ... then take action upon what you learn, ok?

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