July 17, 2023

Reverting Back To The Trajectory Line

There's a lot of things that COVID messed-up.

One of the things it messed up (in a positive way) was the trajectory of a lot of businesses in the 2-3 years prior to COVID. There were a lot of warning signs that things weren't trending positively. Acquisition was hard. For some, sales growth was manufactured by trying to get best customers to spend more.

Then COVID changed all of that. All of a sudden there were free new customers everywhere. Profit. Sure society was collapsing, but your e-commerce business guaranteed you a healthy bonus at the end of 2020.

By Summer 2021, things were changing. The COVID-bump popped.

And in 2023, with the bump gone, many of us are reverting back to the trends from 2017-2019. Sales might look like this.

But with higher prices for many of you reading this post, customers are on a worse trajectory.

Take those two years out (2020/2021), and you can see what the customer trend looks like, can't you?

The "hope" is that there is a bottom, and for many the bottom is being hit. For others, it's a trajectory issue (like the customer image above). The business was headed in a direction prior to COVID, COVID masked the trend, and now the trend is once again revealing itself.

It's the trend (in orange, with customers) that is why Marketing Budget Experiments become important. Now, you don't need to do it the way I do it ... you likely have resources to analyze the information yourself. Use your resources! Project the long-term value of customers purchasing from various channels, forecast sales as a result and apply customer segment mix/migration trends to your customer base.

You do this (obviously) because you want to see what 2024/2025 look like. Changes are coming. The tech folks saw this coming nearly a year ago and shed 300,000 jobs as a consequence. Was that necessary? Probably not. But that was their response. Your response doesn't have to be that draconian. 

However, a response is going to be necessary.

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