Retention vs. Acquisition Budget

On LinkedIn, an intrepid reader asked a question.

• "If cash is tight, how do I decide the percentage of my marketing budget to spend on acquisition vs. retention?"

This is not a Lemonheaded question ... this is an earnest question, one we'll answer every day of the week. What would a Lemonheaded question look like?

• "Should I even bother to spend money on acquisition when cash is tight and we all know that loyal buyers are nine times as profitable as are customers we're trying to acquire?"

Notice the difference?

Your marketing budget should not be divided between acquisition and retention. Your marketing budget should self-determine itself based on the profitability of your marketing efforts.

• If an acquisition activity generates profit, you should continue to execute the tactic.
• If an acquisition activity is unprofitable, you should continue to execute the tactic if the acquired customer makes up the loss within "x" months, with twelve (12) months being a common limit.

From here, your acquisition marketing budget self-calculates. You know exactly how much to spend.

If you don't have enough money to spend on acquisition activities, sit down with your Chief Financial Officer, do your homework, and state your case. If most cases, your CFO will be willing to spend the money because you were able to demonstrate adequate return on investment.

Year of Acquisition

In some projects, I'll look at the year loyal customers were acquired. The results are always fun to analyze!

• 10% from 2021 - 2025.
• 40% from 2016 - 2020.
• 25% from 2011 - 2015.
• 15% from 2006 - 2010:
• 12% from 2001 - 2005:
• 8% from 2000 and earlier.

65% of loyal buyers (in this instance) were acquired 6-15 years ago.

Which means the success of the Retention Marketer came from the success of the Acquisition Marketer (who doesn't even work at your brand anymore) 6-15 years ago. If the Acquisition Marketer doesn't do her job 10 years ago, the Retention Marketer doesn't have work to do.

Am I saying that Retention Marketing is worthless?

No.

I am saying that Retention Marketing is dependent upon Acquisition Marketing. I am saying that the vast majority of readers should spend FAR MORE time focusing on acquiring customer than keeping customers.

The health of your business depends upon it.

Their Rules Do Not Apply To You

A lot of Thought Leadership on LinkedIn about the final days of Stranger Things on Netflix over the past few days.

LinkedIn Thought Leadership Thesis (#LTLT):

• Stranger Things is a Success.
• Netflix Marketers are Brilliant.
• Making The Customer Wait Three Years For Season Five Creates Excitement, Interest.
• Spreading The Final Season Out Across Five Weeks Is Smart.
• FOMO, Fear of Missing Out, Creates Shared Experiences.
• Build Anticipation, Then Have A Massive Payoff.
• Retention Marketing (Catering To Your Best Customers) Is Much More Profitable Than Acquisition Marketing. Stranger Things Proves This Fact To Be True.
• The Reason Your Brand Struggles Is Because You Don't Focus On Retention Marketing And Your Marketing Team Isn't As Smart As The Team At Netflix Is.
• Do What Netflix Does.

I don't have enough hours in the day to respond to this drivel.

First of all, Netflix is selling Stranger Things Season 5. You are selling Widgets. Who has a harder job? You do! It's not even close.

Stranger Things Season 5 is not proof of anything, much less the myriad brilliance of Retention Marketing. Well, let me take that back. If anything, Stranger Things Season 5 is proof of the importance of acquiring customers to the Stranger Things franchise in 2016. Yeah, think about it. How many people watched Stranger Things in 2015? None, it didn't exist. The franchise had to acquire viewers in 2016, those viewers spread the word organically, and the marketers at Netflix did a ton of very challenging viewer acquisition work in 2016 that pays off today. If the franchise stunk (i.e. bad merchandise), it would not exist today. The product had to be compelling, viewers had to try it out, viewers had to tell friends how wonderful the series was, and from there viewer acquisition led to a success story. It was viewer acquisition from nine years ago that #LTLT should be talking about, because without the hard work done by creative/marketing people nine years ago, retention tactics are meaningless today.

Every customer you love marketing to today had to be acquired yesterday.

By the way, do you have $400,000,000 to $480,000,000 of petty cash lying around to spend on Season 5 of a decade-long franchise? Retention Marketing is easier when you have the GDP of Tunisia at your disposal. You don't have those resources at your disposal, do you?

Another fundamental difference between Stranger Things and your Widgets business?

• Stranger Things Ends on Wednesday.
• Your Business Is a Going Concern ... You Sell Every Day Forever As Long As Profit Allows You To Sell.

It is easy to prime the pump for something that fifty million or a hundred million people have watched, something that will end in a few days.

It is amazingly, terrifyingly hard to show up for work every day and somehow convince people that they should buy a widget and then they should pick you over every other widget provider for said widget. Honestly, Stranger Things marketers are working in Hawkings, the widget marketer is working in the Upside Down, trying to stave off Vecna. Every day.

It is easy to talk about Retention Marketing, which is why so many people put us on blast mode about it.

• It is not hard to convince a Starbucks customer to purchase five drinks a week instead of four drinks a week.

It is hard to Acquire customers. Very hard.

• It is VERY hard to convince a coffee drinker who has said "no" to buying from Starbucks for two decades to try Starbucks for the first time.

Content-based Retention Marketing rules do not apply to your business. Your job is so much more difficult. Which is why some people talk about retention marketing on LinkedIn while you work so darn hard to keep the wheels on the widget bus.

Here's One For You

You won't find a single Lemonhead in this entire 17 minute documentary about Dads who take their daughters to a Taylor Swift concert in Los Angeles. As YouTube user @lnsyderloser said "This might be the most wholesome doc I've ever seen".

Extra credit to the Dads who didn't go to the concert and sat in their car for several hours.

Merry Christmas!!

Been posting this image for nearly twenty years ... no need to change, right? Wait, I'm always asking people to evolve. Oh oh.

That was my young corgi at the time (his name was Bert, and he was 14/10 on the Dog Rates scale). He had a problem with crows.

Everybody Makes This Mistake

And by everybody, I mean every incumbent who is about to be sent directly into orbit by new technology.

Do you remember the Lemonheaded comments from catalog leaders back in the 2000-2006 timeframe? I do. They were inescapable. "Ecommerce and Catalogs are the same thing ... the website IS your catalog!!!" Nope. Wrong. Papertarians are still arguing to this day. By 2009 (if I remember correctly) the Catalog Conference ended in New Orleans. Catalog Age went away. DMNews executed the classic "we are hip and modern" gambit with "The Big Fat Marketing Blog" (remember that one?), then they went away. Everything went away. Because ecommerce was not cataloging, even if the same foundational strategies applied to both. Old-school skills were not valued.

• Note:  Look at what I do for project work as we end 2025 and compare it to the work I performed in 2016 or in 2007 when I started my consulting work. It's barely recognizable. Times change. You can't bolt the future onto the past, though we all want to because it helps us feel like we still have purpose.

The people who disrupted classic catalog marketing are the ones who are about to be disrupted. Every generation is disrupted.

P.S.:  I spoke with a 62 year old person who lost his job ... his job (leading one department) was replaced with a position that led four departments. The person hired to replace him was a person with no experience in his industry. Yes, this broke the heart of the 62 year old who spent an entire career doing credible work only to be thrown away and replaced by an inexpensive person with no experience. The 62 year old looked at me and said, "will the young people who did this to me ever get their comeuppance"? Oh yes, they're going to get it. They most certainly will get their comeuppance. The same Search guru who told people that catalog markers were Luddites not deserving of good things doesn't see it yet ... but AI is coming for them, and they'll make the same mistakes the catalog professional did as they are being disrupted.

Post #5,602

This is the 5,602nd post I've written ... about 280 per year for twenty years. More in the early years, fewer in the past decade.

There isn't a single entity who's done what I've done the way I've done it ... writing about what I've written about ... for the past twenty years.

There's nothing about what I've done that would be considered a "Best Practice" by the experts.

And yet, I persist.

Might there be a lesson here for your business?

P.S.:  At the time I wrote this, I received a newsletter via Substack (#coincidence). The author told readers that their efforts had to be, to paraphrase, "spectacular", in order to get anybody to notice their content. This is empty thought leader advice. Nobody is going to create anything spectacular. Nobody. You aren't Apple inventing the iPhone. You sell widgets, and nobody cares about widgets. Your job isn't to be "spectacular". Your job is to be interesting to your limited audience of prospects who care about widgets.

• "Interesting" is achievable.
• "Spectacular" is not going to happen.

Speaking of Losing: NASCAR

Did you pay any attention to the NASCAR trial a week ago? Probably not, because it does not impact 994 out of 1,000 of you. But for the six that did pay attention, watching The Teardown on DirtyMo Media (click here), it was as riveting as "content" can get. Michael Jordon suing NASCAR, claiming they are a monopoly, squeezing their own racing teams out of money while generating nine figures of revenue for themselves?

Oh my God, the testimony. The text messages. The emails from team owners to NASCAR. The email from Bass Pro Shops to NASCAR. The Judge begging the parties to settle because he knows that if Michael Jordon wins, it means NASCAR is a monopoly that will be broken up and it will cease to exist as it exists today ... and he knows if Michael Jordon loses, it's the end of his teams, they're done.

I mean, NASCAR thought a hokey twelve-car made-for-tv summer racing series was their "competition". They can't even see that FloRacing is their competition ... Flo essentially has their own sprint car series, they just bought their own late model series, they are aggregating regional series and dirt tracks. On a Saturday night in July, a Flo subscriber can watch a dozen or two dozen main events across the country, each race taking about a half-hour of time. NASCAR Executives have to be asleep at the wheel to not see the threat.

Eventually the testimony was so overwhelmingly against NASCAR that NASCAR elected to settle. The terms of the settlement mean that ALL NASCAR racing teams benefit ... would you do that if you went out on a limb even though the teams you compete against were too cowardly to put their necks out there? Would your terms of settlement help teams that wouldn't help you? That's what Michael Jordon did. He helped all the racing teams with his settlement terms.

In the late stages of a business model, those within the business model become so disconnected from modern realities that they miss the "easy things". I see this in my world ... catalog boutique agencies and #papertarians who are so utterly disconnected from modern commerce that they actually believe Gen-Z loves paper. They'll say absurd things like "74% of marketers believe print has the highest ROI of any marketing discipline."  Really? If that was true, what would stop marketers from taking advantage of the highest ROI of any marketing discipline? Nothing. Absolutely nothing. They'd employ the discipline immediately.

Of course, they don't have a Judge helping them understand their shortcomings, they're instead subject to the raw realities of capitalism. Saks comes to mind ... suing Nordstrom because a Chief Merchant is leaving to go to Nordstrom. How utterly clueless do you have to be to believe THAT is your problem? You're nearly bankrupt and that's where you'll spend your remaining $$$ ... on lawyers?

As you get older, this stuff gets exhausting. You've seen the patterns repeat for four decades. You realize there isn't anything that can be done to stop the patterns. You simply hope your readers aren't Lemonheads.

Speaking of Losing: Not Understanding Shopify

History is littered with the concept of marketplaces. 

"Shared money".

The entire purpose of a marketplace is to capitalize on shared money, to a point where more money comes in then goes out.

Cities performed this function in the old days. Think about "downtown" ... shared money as rural people came into the city and spent money ... more money going in than going out. This model was eventually blown up by interstate highways, which pulled retail out of downtown to the interchange. Downtowns died, eventually being repurposed.

Pre-internet, you had direct-to-consumer brands leveraging the marketplaces of their day ... lists and co-ops. Catalogers were nothing more than participants in a large marketplace that had more money coming in than going out. Ecommerce ended their marketplace.

Ecommerce was nothing more than a large marketplace fueled by an opaque network of shady digital advertisers using Google/Facebook/Display Ads as the hub of their activities. This worked well, because more money came into the system than went out of the system ... money was reallocated from suburban malls into the opaque digital advertising system. Of course, Amazon harmed this marketplace with their own marketplace.

Amazon is a gigantic marketplace fueled by algorithms. This worked well, because more money came into the system than went out of the system ... why wander in the Google/Facebook wilderness when Amazon self-contained the entire shopping experience? Of course, Amazon is now being harmed by the latest flavor of marketplace ... Shopify.

The Lemonhead will scream "AMAZON IS NOT BEING HARMED!!". The Lemonhead always defends the "old" business model (they're still defending department stores ... self-contained marketplaces from the pre-internet days). For a period of time, Shopify will have a money advantage (which is the secret of a marketplace), because more money will go into their world than will flow out of their world. This doesn't mean that Shopify will "win" ... but somebody doing what Shopify is trying to do (marketplaces fueled by AI) will create something interesting ... they will find a solution where they bring in more money than goes out of their ecosystem (likely at the expense of Amazon, Google & Facebook).

• Aside:  The entire brief history of social media is more traffic coming in than going out, the subsequent process of losing traffic happens much faster in social than in retail and/or ecommerce ... providing great case studies of when "tipping points" happen.

On the surface, Shopify is a self-contained world for a small-to-medium sized ecommerce brand to sell stuff. Under the covers, Shopify (or somebody who will do Shopify better than Shopify) is a modern marketplace seeking to bring in more money to the ecosystem than leaves the ecosystem.

Losing companies tend to over-focus on two ends of the spectrum ... on the 30,000 foot view of commerce (will ChatGPT supplant Google) or the 3 foot view of commerce (can Buy Now Pay Later grow sales for us). Both are important. Between 3 feet and 30,000 feet is where the Lemonhead does not understanding the Shopify effect on ecommerce ... the goal of every company is to bring more money into their ecosystem than goes out of their ecosystem. Which means, of course, if you are a $70,000,000 ecommerce brand, you have to figure out how to use all of these "ecosystems" to your advantage so you have more money coming in than going out.

BNPL Update

BNPL advocates chimed in this morning with feedback following yesterday's post.

Can I show you something?

Home ownership is a classic example of BNPL. You buy the house, and then spend each month "paying later".

Let's assume you buy a new home today at a cost of $500,000, with 20% down. You finance $400,000 at 6% for 30 years. Let's assume your home appreciates by 5% per year, meaning in the year 2032 you sell the home for $709,018. This is a profit of $209,018. Who gets all of the profit you generated?

• You Get $709,018.
• You Must Pay Off Your Mortgage = $357,930 subtracted.
• You Must Pay Real Estate Fees = $42,541 subtracted.
• You Must Pay State / Local Taxes = $17,725 subtracted.
• You Paid Interest For Seven Years = $158,759 subtracted.

If we take the $709,018 and subtract $357,930 / $42,541 / $17,725 / $158,759 we are left with $132,063. Remember, you paid 20% down, so you are getting the $100,000 back you originally put in to start the process, leaving you with $32,063.

Who made more money off of Buy Now Pay Later (i.e. your mortgage) than you made?

1. Your bank.
2. Your real estate agent & firm representing your real estate agent.

And yes, you can pick some nits about possibly writing off interest via itemized deductions and writing off closing costs (which I didn't include above but those will get you as well) and writing off real estate fees & state/local taxes) and the net present value of money blah blah blah. It doesn't change the story one bit.

• You get approximately 16% +/- of the profit of your home sale, everybody else gets 84%.

So when I read the following message (below) this morning, I can see that third parties are telling you to do something ... because ... it benefits third parties! Life is designed to benefit third parties, not you. Don't be a Lemonhead.

Speaking of Losing: Buy Now, Pay Later

Or as the pundits say, BNPL.

BNPL is what losing looks like. If you believe that the problem with your business (which means you are already losing, by the way) is that customers can't pay for your merchandise today, the solution isn't to give away product and get paid next year.

BNPL and Credit cause a whole series of interrelated and completely awful outcomes. I know this to be true ... having worked for Eddie Bauer (owned by a credit crazed parent named Spiegel) and Nordstrom, it's a different environment when the credit people enter the room. They don't care about what you sell. They care about 29% interest and capturing data. They want to turn a $400 handbag into a $466 handbag at twelve payments of $38.80 each.

Strong Analytics Hint:  Analyze the long-term value of a customer who buys a $400 handbag for $466 spread out over twelve months ... see if that customer behaves differently than a customer who pays $400 for a handbag. This is where a BNPL mouth breather says "yeah but the customer paying $400 for the handbag is paying Visa interest so why shouldn't the brand get the interest instead of Visa?" The reason, dear Lemonhead, is that over five years you slowly build a customer base of credit dependent customers who owe both Visa and you interest, those customers prefer a specific portion of your merchandise assortment which means your merchants slowly cater to credit-dependent buyers instead of those who love your products/merchandise ...  your "brand" has been harmed. Take a look at the evolution of the merchandising assortment of credit buyers vs. third party payment (i.e. Visa) buyers ... it's different. Seriously ... do the work.

Losing companies manipulate payments.

Winning companies sell merchandise customers are ready to pay for today.

Losing

You're painfully aware that I have three time-consuming hobbies.

1. Headphones.
2. Weather.
3. Pickleball

There are different disciplines within Pickleball. You have gender doubles (i.e. I partner up with another guy). You have mixed doubles (I partner with a female player). And then there is singles. I enjoy playing singles in tournaments.

On Saturday, I won two games 11-0 and 11-2. I didn't learn anything there. I lost two games 3-11 and 3-11. I didn't learn anything there either. The other three games I lost 7-11, 9-11, and 11-13. I learned A TON in those games!

Yeah, this relates to your business.

Let's pretend you are a $70,000,000 business that generated $500,000 of profit. Honestly, you are on a losing team. Yes, you made a profit, but you should have made a $7,000,000 profit. What are the mistakes you made along the way? Did you have good business in early June and fail to do anything to take advantage of what you learned? Did you learn why business was good? 

Did you run out of a key product and feature it in an email campaign anyway? Did you have huge successes in Marketplacces and choose to not spend any additional money? All of these are like the 9-11 game that I lost on Friday. You're close to doing the right thing, but you choose to do something else. And at the end of the year all those little losses add up and you have a losing season.

When you have a losing season, you'll have good days and bad days. It's all those close losses that make a difference. How many close losses did your department and/or company have in 2025? What will you learn from the close losses?

P.S.:  This is what losing looks like. "Irreparably harmed". My goodness, they spent fifteen years pursuing the failed omnichannel thesis, that's what caused "irreparable harm"!!

Behavior: Past 10 Years

Bad behavior has happened forever. I spent nine months in the dot.com era at a retargeting startup. It seemed like every-other-week my company issued a press release suggesting that the fired individual was leaving "to spend more time with his/her family".

All sorts of awful behavior have been sprung on society in the past decade. These things go in cycles ... there will be bad cycles and then there are the horrific cycles we experience today. There aren't many good cycles. Go back four thousand years ago, there weren't many good cycles back then, either.

Always remember that when society goes bad, your business can represent good. There is a strong business case to be made for being good. Unfortunately, it's too easy to profit from being bad.

AI Recommended the QR Code and Associated Text

 

Which brings me to this bizarre commentary of modern retail.

"Macy's CEO balances wartime agility, long-term vision".

Sure he does.

Who, specifically, describes their leadership style as "highly adaptable"? How specifically do you know that you are "highly adaptable"? Did you ask your employees? And "wartime agility"? My goodness. The worst thing is that some Lemonhead is going to embrace this vapid nonsense.

Did Macy's pay to get this pabulum published?

I get all the teasers ... back in the day it was trade journalists asking for feedback ... then it was trade journalists asking for money ... now it is third party content harvesters offering to help me craft articles that get published in Business Insider or Forbes ... "YOU ONLY PAY IF YOUR CONTENT IS ACCEPTED". Well of course it is going to be accepted, that's how everybody makes money ... except for me.

Anytime you see a retail thought leader publish on Substack that they contribute to Forbes, run away ... don't walk away from the content. As the kids say, the content is "sus".

Overcontacting The Customer

Here's how one company targeted me with email discounts/promotions.

• Sunday = 2 times.
• Cyber Monday = 7 times.
• Tuesday = 5 times.
• Wednesday = 4 times.
• Thursday = 2 times.
• Friday = 2 times.
• Saturday = 2 times.
• Sunday = 2 times.

During the same window, this brand posted just six (6) messages on Instagram, imagery of products.

I asked AI to convey the vibe ... not sure what one of those signs represents or what happened to Tomatohead's legs, but here you go ... this was the fifth attempt at getting it right and AI failed.

Sending twenty-six (26) email campaigns in eight days could well be a failure of imagination ... of course, if you frequency test your email campaigns you know the answer to that question, right?

Do you frequency test your email campaigns? If not, why not?

Competition / Cooperation

In 2005, retail brands thrived via mall-based retail, classic cooperation between competitors. Having a Nordstrom anchor on one end of the mall and a Neiman Marcus anchor on the other end of the mall benefitted Nordstrom, Neiman Marcus, the food court, Sunglasses Hut and Talbots. At Nordstrom, we knew that when Neiman Marcus built a store at one of our locations, our sales increased. Neiman Marcus customers walked across the mall and purchased from us.

The catastrophic outcome of the omnichannel thesis soon followed. When the Nordstrom customer bought online from Nordstrom, there were no ancillary purchases at Neiman Marcus, because the customer didn't have to visit the mall anymore. The absurd silliness of "buy online pickup in store" did not push the customer to the mall - my clients simply pushed the customer to the digital ecosystem and the mall emptied.

When traffic disappeared, the weakest clients, those with pre-tax profit < 5%, those businesses suffered first. They closed locations, which meant even less traffic. As locations closed, the cooperation that once caused businesses to thrive became untenable. Better to protect your p&l than to protect J. Crew.

Eventually (i.e. 2024-2025), a semblance of equilibrium finally existed. The Lemonheaded omnichannel experts moved on to their next pursuit ... AI. I was always amazed at how little these omnichannel experts knew about actual retail and actual customer behavior. They simply could not conceive how encouraging online shopping (which was going to happen no matter what) would destroy in-store mall-based consumerism, even though it was their job to understand this simple outcome. Do you trust these Lemonheads with a fusion of vision, strategy, and AI? 

No. You do not trust them.

What do you think happens when ChatGPT or Shopify or others offer viable ecommerce "cooperation platforms" fueled by AI? It likely only takes a 10% drop in shopping traffic on Google / Facebook for those forms of cooperation to collapse. Just like that, you've got less traffic and you've done nothing to cause less traffic. It'll be like a digital mall collapsing.

We saw catalog brands emptied out by ecommerce.

We saw retail brands emptied out by the omnichannel thesis.

Imagine what happens to traditional ecommerce brands when AI actually takes hold?

It's going to take awhile and hundreds of billions of dollars will be incinerated in the process while we run low on water powering data centers, but a new form of commerce is coming ... and this time, the cooperation-based digital world of marketplaces / Google / Facebook / ecommerce is the one that will likely be transformed. Not eliminated (there are plenty of malls and there are many catalogers still in business), but transformed. Transformation is a difficult process for Lemonheads to deal with.

Disruption

Consultants can take a path favored by hyperbole. DISRUPT OR DIE! REAP THE REWARDS OF AI!  

A few retail gents come to mind on this front. The rhetoric is exhausting. 

It's one thing to point out that a business needs to change. It is quite another thing to get a hundred or a thousand or fifty-thousand employees to move in concert in a direction that results in change, much less change that is appropriate. Ask a consultant to work for a company and make change actually happen and you'll quickly see that there is an enormous difference between a Thought Leader and a Leader.

Thought Leaders are plentiful.

Leaders are likely plentiful as well, but aren't always given opportunities to lead.

Thought Leaders want you to take big swings. Of course they do! They're not accountable, are they? If the idea doesn't work, it's your fault, you are an idiot who cannot be agile enough to thrive at the "speed of disruption". 

If the idea works it's because they are brilliant.

Who have you met that had success transforming how multiple brands executed marketing? The individual must demonstrate significant sales growth and even better profit growth ... not be a transformation expert on a strategy team at JCP or Kohl's. Who have you met? What was it about that person that led to transformative results?

January

January can be a "blah" month from a marketing standpoint. The thrill of achieving an order at 60% off is replaced by the tepid response of a customer getting 70% off liquidations products.

Why not use January as your "experimentation month"? Try many different ideas, see what works and doesn't work.

We need more experimentation in ecommerce. Anything something gets "optimized", as ecommerce unfortunately is, there is an opportunity to experiment, to try new ideas. Use January as a month to experiment and learn.

Speaking of Creativity

Here - here's an "omnichannel brand" as the pundits like to say, doing something risky. Go ahead, click here! More here.

You could send eleven (11) Cyber Monday messages on Cyber Monday and the day after as one popular brand did, offering 80% off sale (think about that one).

Or, you could do something creative.

Do something creative.

Tis The Season

The best businesses I work with balance merchandise, marketing, and creative.

Cyber Monday obviously skews strongly to pricing ... no need for marketing / creative brilliance. That's how Thought Leaders like things ... they either make everything so complicated you couldn't possibly execute properly (#omnichannel) or they pick a corner of the triangle above and tell you that excellence in one area equates to excellence in all areas.

With Christmas a few weeks away, large businesses are applying their version of the "triangle" above to coax customers into orders. Tis the season for the image they believe will convert a customer to an incremental order. Any similarities?

When the largest "brands" all choose one direction, you have an opportunity to choose another direction. Kohl's / Macy's / Target / Walmart all clearly view the world through the eyes of a specific type of female aligned with the color "red".

Ecommerce is begging for somebody to be creative. It's one thing to optimize boring/sterile Facebook Ads paired with 60% off on Cyber Monday. It's another thing for agencies to recommend one type of woman as your "idealized consumer". It's difficult to walk away from that world and chart your own course via creative strategies. But it's necessary as we move into 2026.

Now We're Counting Grocery Purchases For Black Friday - Cyber Monday? Oh, I Guess We Are

He bought canned pineapples, it's part of the record!

"... consumers shopping mainly at supermarkets".

Look around, because we are constantly being reminded what happens when we put non-smart people in charge of things, or worse, give them access to a megaphone.

"... consumers shopping mainly at supermarkets".

" ... according to a survey".

Want To See If Your Customers Are Paying Attention To You?

Buried deep on the Headphones.com website is this (click here for proof). The comments were obviously staged as well, and are delightful.

I share this with you after enduring a day of absolute Cyber Monday pummeling. One "brand" sent me six email messages promoting Cyber Monday, offering 60% off. Three went straight into my junk folder, three persevered and made it to my inbox.

When you don't have a creative bone in your org structure, you send six email messages on Cyber Monday promoting 60% off. It's all you have - you are begging the customer to buy something on a day that generates customers who have low long-term value. You'll spend the rest of the year offering more discounts because rebuy rates are too low. You'll spend eternity doing this, you can't get out of the cycle. You populate your customer file with the worst possible customers, the ones who only purchase "because it is a game".

You do not want those customers.

And yet?

So darn many of you keep attracting those customers.

Give creativity a try. It won't work at first - it can't work when the customer has been trained to accept enormous discounts. It is the path out, however.

It's Here

Yup, Cyber Monday. Are you taking care of your customers today or are you taking care of those who earn money via thought leadership?

Performance Bonuses

As a 26 year old at Lands' End, I enjoyed the period between Thanksgiving and Christmas. All of the hectic work needed to get Holiday catalogs out the door happened in August / September. By Thanksgiving, there was nothing left to do but count the money. And get February / March catalogs out the door. The train must run on schedule.

So there I am, sitting at my desk right before Christmas, when my boss stops by and hands me a check.

"What is this?"

"Half of your annual bonus."

"I get a bonus?"

"Yes. If the company meets profit goals, you share in the profit."

"Say what now?"

"We met our profit goals. Our owner pays half before Christmas because he knows it is important for families to have the money at Christmas. He pays the other half when our fiscal year results are announced in March."

Well I've never been so excited to get half of 10% of $28,000 in my life, less taxes and withholding!

From that moment, I became obsessed with profit. It was a way for everybody to get paid more money!

The incentive only goes up from there ... all of a sudden it's a 20% bonus as a Manager, a 40% bonus as a Director ... it was quite a bit more than that when I was a VP at Nordstrom. Do the math on that one.

An Eddie Bauer bonus became the down payment on a first home. That was meaningful.

My staff at Nordstrom became agitated when our division was folded into the Retail division. The Online division at the time had a bonus structure, the Retail division did not (for analysts / project managers). I was able to get half of the annual bonus added to their annual salaries, guaranteeing them something. Didn't matter. They were livid they weren't being rewarded for a year of hard work.

Bonuses accomplish three things.

1. They allow employees to share in the success of a company.
2. They teach employees to focus on what matters to Management / Ownership. In most cases, that was either sales growth and/or profit.
3. The employee isn't performing soulless work while hoping for a 2% cost of living increase when the Owner sails off in a yacht. There's a reason, a purpose, for doing a good job if salary increases are unlikely and promotions are unlikely.

I realize this message won't get anybody to do anything different. But that's not the purpose. The goal here is to appreciate those of you who are blessed, who might get a check in the next month or early next year ... helping you appreciate your lot in life. Bonuses are good things.

The Cyber Window

In my projects, I create a variable that measures if a customer purchases during what I call the "Cyber Window".

• The Wednesday before Thanksgiving to the Saturday after Cyber Monday is the Cyber Window.

My Elite Program clients recently learned how valuable all these customers are that are acquired at 60% off plus free shipping (plus 80% off clearance items).

One of the biggest problems you face is the "repurchase opportunity" for Cyber Window buyers. When you acquire a customer in September or October, the customer is very likely to buy again in November / December. You get to double-dip your chip, you generate a second order quickly. That dynamic drives an increase in future value. The Cyber Monday window? It's doomed to fail. You fulfill the need of the customer to get a gift for Christmas (in many cases), so the customer is dormant through Christmas, and then the customer is dormant in January / February because you are liquidating stuff and the customer isn't there for liquidated merchandise, the customer had a need met via a gift purchase at 60% off.  The "brand" (that's you) misses out on the "response opportunity", driving down future value.

So stop doing that!

I get it, you want to acquire customers, and it is easy to do so during the Cyber Window. So you can do that. But don't be a Lemonhead and acquire the customer at 60% off so you don't make any profit and then fail to generate profit downstream ... you're not here to fill the void with empty calories.

Tell me why I'm wrong (kevinh@minethatdata.com).

Business Therapy!

Need Business Therapy? Want to talk about anything related to your business?

If you'd like an hour of Business Therapy, contact me now (kevinh@minethatdata.com) to get started. Here is a link to all other project opportunities.

Well, That Link Didn't Work

This is the link about the Tennessee basketball coach ... yesterday's link was incorrect. Yay, errors!

Business Parallels

I look to sports for parallels for my clients. I have to, because there are few business parallels to talk about. If somebody is truly doing something great, the greatness gets sanitized into "5 Tips For Cyber Monday Success (Number 3 Will Surprise You)". No company is going to share that Lucy in Marketing is doing amazing things. In fact, "Lucy" will have to get a job somewhere else because "Lucy" will never be compensated fairly for her accomplishments ... and that means Lucy won't be compensated fairly at her next job, either. Compensation, unfortunately, is tied to being a CEO or C-Level executive, and Lucy will be told that she's "not ready" for that ... aka, the company doesn't want to compensate her for her contributions. (bonus points if you can see what AI messed up in the image of Lucy I asked AI to draw).

Wow, where did all of that come from?

It's different in sports. If you do a good job at a smaller University, bigger Universities come calling, because everybody can see the outcome (wins) of your efforts. In business, nobody can see what Lucy accomplished. In sports, people actually want to learn more about what somebody did to become successful, oftentimes the prescription for success is shared.

I find myself looking for business parallels in sports. I frequently look for people in sports who "do things differently", who then have success, who are criticized for their success because their success doesn't align with "best practices".

Until he passed, I so enjoyed reading about Mike Leach. Yeah, he had a scandal or two. But he also did things differently, and he constantly won at places where coaches don't usually win. Do you want to read some random thoughts from the man? Try this (click here).

Which brings me to Kim Caldwell (click here). The Women's College Basketball Coach at Tennessee. Imagine being in your mid-30s, coaching at the school that Pat Summitt made famous? Imagine having just one year of D1 coaching experience under your belt?

I adore stories like this!

I adore them because I get to meet people like this in my work. They're flying under the radar, it's easy to see their greatness, even at a time when their own company likely doesn't see it. It's easy to look at "Lucy" and imagine her running a business in twenty years ... though she should probably be running a business within five years.

There are so many brilliant people working in ecommerce. We need to give them the kind of chance that Tennessee gave Kim Caldwell.

The future is so bright! Young leaders are comin', folks!

Merchant Chaos

Look, it isn't easy to be a merchant. You're always wrong. Business success ultimately rests on your shoulders. Sure, the trade journalists and vendors claim that "SEAMLESS PAYMENTS" are the key to Q4 success. They are wrong. Horribly wrong. Businesses that sell stuff that customers want know the key to success.

However ... merchants don't have to behave in a chaotic manner.

I see merchant chaos all the time in my Comp Segment analytics.

I look at new merchandise comps and existing merchandise comps.

The two tables are filled with chaos. New Merchandise ... look at October / November / December ... big comp segment gains in new merchandise, followed by five consecutive months of new merchandise declines. Somebody made big bets for "Holiday" and then had a poor plan for Spring. Chaos.

Existing Merchandise ... we see seven consecutive months of losses, five of the months feature double-digit declines. That's a problem! And then we see two straight months of huge gains, on top of acceptable performance the year prior. Chaos!

I'll take the data a step further ... analyzing comps for items selling at/above their historical average price point and for items selling below their historical average price point (i.e. discounting).

Why did existing merchandise comps perform well? Because of discounts/promotions ... April / May comps on discounted items was +21% and +33%. More chaos! Try planning the following April / May off of chaotic tactics.

You can see the signs of a sick business here.

• Full Priced Comps in the Past Year = -8%.
• Discounted Comps in the Past Year = +17%.
• Total Merch Comps in the Past Year = -1%.
• New/Reactivated Comps in the Past Year = +4%.

This business is sick. Unhealthy. Management is papering over the challenges by discounting. The Smart Marketer is trying to protect the future by adding new/reactivated buyers.

Do you have comparable analytics to what I've illustrated here? Are you actively tracking what is happening at the brand you work for? As you've learned this week, this stuff is really important, isn't it?

Smart Marketer > Bad Merchandise Productivity

The comp segment analysis tells me a lot about how smart the marketer is.

Look at January / February / March. Comp Segment productivity (customers with exactly two purchases in the past year, measuring how much they spend in the next month) was awful ... -16% / -20% / -15%. 

Now look at Comp New/Reactivated customer counts for Jan / Feb / Mar. +5% / +2% / +3%.

This is a "tell" ... it tells me that there is a Smart Marketer working for the company. When existing customers don't like what you are selling, new/reactivated buyers shouldn't like it either. However, the Smart Marketer doesn't care what the merchants are doing (more on this topic tomorrow). The Smart Marketer knows that if merchandise isn't performing, then new/reactivated customers have to increase, for three reasons.

1. To meet short-term demand/sales goals.
2. To move inventory, you don't want that stuff stacking up during a downturn, that only creates more discounts and poisons the customer file further.
3. To generate enough customers to protect next year.

The Smart Marketer knows these things. The Smart Marketer protects the business, knowing the Smart Marketer WILL NOT GET CREDIT for protecting the business. The Smart Marketer does it because it is the right thing to do.

The Lemonhead? The Lemonhead sees a sales decline and cuts the marketing budget, saving pennies, harming the ability to move inventory today, harming the ability of the brand to be successful tomorrow.