The business leader felt that "market forces" were working against customer acquisition via paper. So she said ... "we made the difficult decision to stop acquiring customers via paper."
This business has 100,000 twelve-month buyers, and 30% of them are retained year-over-year, spending $200 each.
This business generates 75,000 new/reactivated buyers per year, spending $125 each.
Now that this business made the "difficult decision", let's see what happens.
Business As Usual: 100,000*0.30*$200 + 75,000*$125 = $15,375,000.
Difficult Decision: 100,000*0.30*$200 + 30,000*$125 = $9,750,000.
Ouch.
But it gets worse. Let's carry the forecast through to the following year.
- 60,000*0.30*$200 + 30,000*$125 = $7,350,000.
Difficult decisions often cascade into other difficult decisions ... like trying to explain to the Owner/Shareholders why you let a $15 million dollar brand become a $7 million dollar brand.
2024 is the Year of Having a Plan.
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