A few years ago Customer Development projects were popular (click here). They were popular for a good reason ... there were all of these new customers courtesy of the COVID-bump. My client base wanted to know how those customers would stream through their customer ecosystem.
Well, thirty months later the customers streamed through the customer ecosystem. Most of the customers are now gone.
Many of you are curious why customers didn't stick around? You wonder why reactivation programs didn't work? Your vendor partners promised you "riches" in this pile of customers. Riches happened for a short period of time.
Here's what the story looks like for many of you.
- 1st to a 2nd Purchase: 12 Month Probability = 22%. 24 Month = 28%. 60 Month = 33%.
Now, I've shared this data for nearly twenty years out here. I've repeatedly told you that when 22% of last year's customers repurchase, you don't really have a business with long-term customer value ... you just churn customers and are required to have low-cost customer acquisition programs to replace the customers to match the lack of long-term value.
Here in 2023, customer acquisition has become much harder for many of you.
The harder customer acquisition is, the more important it is that you accomplish two tasks.
- Get your customer acquisition costs as low as is possible (and that, by the way, is much lower than you think it is).
- Get your future profit per customer as high as is possible.
I know both tasks are very challenging. You believe you've already unearthed every possible option. There are more options. Try developing partnerships with comparable companies in other industries that leverage different marketing methods. Learn what can be done. I can't tell you what to do as y'all ask me