April 13, 2023

The Organic Percentage

Back to our relationship.

One of the most fascinating aspects of marketing is understanding what your Organic Percentage is.

The Organic Percentage is, of course, the percentage of customers/sales that happen if you do nothing. If you don't spend any marketing dollars in a given month, you will still get new customers.

If you are a startup, your Organic Percentage is low. Nobody knows who you are, and you have to do "something" to create awareness.

If you are Macy's, everybody knows who you are and many have forgotten you altogether! Regardless, you spent decades "building a brand" ... and that brand pays you back via new customers who shop without the aid of marketing spend. Purists would suggest that marketing dollars spent in 2006 are paying off in 2023, and they are probably right ... but you don't "know" that so you cannot attribute Organic New Customers today to marketing activities in 2006.

What happens if you don't know your Organic Percentage?

What usually happens is this ... if you are trying to figure out how much to spend in a month, you'll fit a line that is more linear in nature, causing you to think you can spend more marketing dollars monthly when in reality you simply can't do that.

Know your Organic Percentage, ok? Please, know this metric and thoroughly understand it!

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Oh, It Adds Up

Let's look at an example. You have a winning item. It sold 50,000 units last year at an average of $30.00 each, for $1,500,000 in sales....