Returns

You're probably already doing this, but you evaluate the future value of customers who return merchandise, correct?

Thirty-one years ago I built a model that evaluated future return rates for customers. This was about three years before e-commerce began playing a role in B2C brands, which meant that the way a customer bought something was to receive a catalog. My model showed that if a customer bought three times and returned 60% of what the customer purchased, the customer would be unprofitable moving forward.

Guess what? We stopped mailing "some" catalogs to high-value but high-returns customers.

Let's just say that customers HATED me for doing this! We eventually had to override my model for a handful of customers who berated our call center employees.

In modern B2C marketing, you are under no obligation to spend ANY marketing dollars on a high returns customer. Don't do it. Your website is open for business 24/7/365.

So stop it. Stop spending controllable marketing dollars on customers who harm your profit and loss statement.

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