The Contrast

On the one hand, a print-centric vendor wrote on Thursday about a webinar discussing the myriad ways that print is beneficial.

On the other hand, my wife was participating in a community-based video chat with 80-100 people from all walks of life. During the three hour event, one of the women on the video chat asked ChatGPT how to solve a problem that the community was having. These women were primarily age 50-80.

All around us are Lemonheads ... authoring nonsense-based thought leadership about AI or trying to pull us back to the late 1980s by demanding we send high-quality paper to customers.

You, however, are a smart practitioner. You're ready for the transition that is coming. You're already participating in it. You see how Community and AI work together ... of course you see it ... if a video conference with a hundred women age 50-80 see it you'll see it too!

A Preview of Things to Come

This might already be happening at some level.

History:  When e-commerce took over from catalog marketing, new "channels" emerged. Over the course of fifteen years, money that would have been spent in the list industry and/or catalog co-ops evaporated, migrating over to search and social and display and affiliates and then to Amazon ... etc. Now, money went in those areas because that's where humans went. A combination of eyeballs moving elsewhere coupled with catalog co-ops automating human tasks resulted in the death of the catalog list industry (around 2005-2007ish). The continued migration of eyeballs to a search/mobile/social world caused the eventual (and predictable) collapse of the catalog co-op industry.

See how that all played out? Fewer eyeballs caused reduced performance. Any dollars left in the catalog ecosystem went to the co-ops (automated) instead of the list industry (humans), then the dollars left the co-op ecosystem as too few valuable eyeballs were captured by the co-ops. 

Future:  A person told me today that they perform most of their searches on ChatGPT. "It's just easier, I'm leaving Google". Here in the United States, what happens when thirty million people use Google less and AI more? You're probably saying "what do I care?" You should care. When those eyeballs leave Google, those eyeballs aren't on Google looking at your Product Listing Ad, are they? This should create a fun dynamic, because there will be less eyeballs to buy your products, which means that the Lemonheads will PAY MORE for the clicks that remain, rendering search marketing less profitable. Search will collapse in the manner that the catalog list industry collapsed. It won't die ... the catalog co-op community was a logical evolution of the list community. But it will become a less viable avenue for you to find new customers. It's relevance will collapse. And you'll be desperate for new customers if you are a Lemonhead.

I know, you're thinking that Google will solve their problem with AI. They might. They might also experience the rusty irrelevance that all incumbents experience when trying to bolt their solution onto a legacy solution. Ask Macy's how omnichannel strategy worked out for them.

This is why I'm going to spend considerable time talking about new customers, talking about scoring new customers. We need a process, a framework, to understand how coming changes are going to impact the businesses we manage. Everything that is coming in the next five years needs to be understood. You are not some stupid Lemonhead who "Embraces AI" or offers thought leadership on the fusion of "Search, Commerce, and AI". You are a practitioner who understands business. That's what I'm going to help you do. I'm going to help you understand how the new customers you bring into your business impact your future.

P.S.: From a ChatGPT question ... "who uses the term Lemonhead"?

Scoring New Customers

News today that OpenAI is going to integrate discovery and payments within a chatbot should excite you and terrify you (click here).

I think carefully and often about what my role needs to be over the next five years. That role becomes clearer by the day. 

• I have to be the person who tells you if the new customers you acquire via technology are acceptable or not.
• I have to be the person who understands the intersection of technology and the merchandise you offer. In other words, I don't have to understand the technology ... I have to demonstrate to you how technology is impacting your business. When a new customer purchases some obscure item that is recommended by technology, I have to show you how your business is impacted going forward.

In upcoming posts, I'll talk about Scoring New Customers. I'll have to come up with a better name ... maybe you have one for me? Regardless, this intersection of technology/merchandise/channels is going to play out in a familiar manner, and somebody needs to be there to show you how every customer you acquire, every day, will change the future trajectory of your business. When I say this is going to play out in a familiar manner, I have the receipts ... when e-commerce took over from old-school catalog marketing, the old-school pundits told you to be "omnichannel", to do everything ... which meant you kept doing the old-school stuff that old-school pundits needed you to keep doing.

• How do you think old-school e-commerce professionals are going to respond to integrated discovery/payments within AI?

I see this gaping hole in the marketplace where "somebody" is going to have to explain the impact of AI-style decisions on your customer file. Example ... a business used AI to reactivate customers, but the reactivated customers were "different" than the typical customer. This changes what the brand needs to feature to these customers going forward.

For me, this is going to be SO MUCH FUN!

For you, you'll have to have this knowledge, you'll have to be smarter than the Lemonheads who blindly adhere to binding AI to the old-school e-commerce platform.

Over on LinkedIn

I shared information about "when" a first-time buyer repurchases. As you know from reading this stuff for the past twenty years, the first three months after a first purchase mean everything. In fact, for most of you, 95% of your marketing efforts should be focused on new customers and then converting the first-time buyer to a second purchase within three months of the first purchase.

Here's the LinkedIn link ... at 5,700 views as of this writing.

P.S.:  The comments on that post are a fun romp, allowing one to evaluate the difference between practitioners and thought leaders. One of the comments is a real peach!

Try A Test!

Why don't you put together the two themes I've discussed most often this year for a September - October test? What stops you from doing this? (seriously, be honest, what stops you from trying this?)

Sports / Business Philosophy

I came across this quote in the book Bill Walsh (49ers coach in the 80s) wrote sometime back ... I have a copy out in the Casita, and there aren't many copies available. This quote was featured on Bluesky from a football coach. I circled the quote in orange.

"You start first with a structural format and basic philosophy ..."

What is your "structural format" and "basic philosophy"?

I can outline mine ... quickly.

• There is nothing more important than what you sell ... the only reason a customer buys from you is because you sell something that the customer needs or wants.
• Unless your annual repurchase rate is sixty percent or greater, the single most important marketing function you must perform is a non-stop all-consuming focus on customer acquisition.
• Instead of focusing on customer loyalty, focus on converting a first-time buyer to a second purchase ... quickly. By doing so today, you will have more loyal buyers tomorrow.

The most successful companies I work with excel at all three endeavors outlined above.

What is your "structural format" and "basic philosophy"?

September New Customers

You've got six(ish) weeks to get ready for the best month to acquire new customers ... September! Nearly every project I work on for brands with a strong Christmas Season indicate that September is the best month to acquire new customers. Learn more by watching this brief video (click here).

Great Moments in Outsourced Link Management History

Probably my greatest professional moment ... at the absolute peak of my consulting powers, came back in 2012. It was a simpler time ... so much less stupidity and corruption ... Macy's was viewed as an omnichannel leader for the ages ... catalog brands weren't being fired by their printers and catalogers were easily able to procure paper from their favorite paper rep. In my world, I was writing parables via the "Gliebers Dresses" framework. 

Why? 

A trade journalist and a consultant collaborated to nuke my reputation, publishing a hit piece in a blog hosted by what was called at the time "Multichannel Merchant". I lost more than half of my business as a consequence (for about nine months), in case you're wondering why I have issues with trade journalists.

I was able to rebuild my business via the "Gliebers Dresses" framework. I could talk about industry issues without having to have a vendor or consultant or paper rep or trade journalist take me down ... what are they going to do, get mad at Roger Morgan, the Chief Operations Officer of a fictional catalog company?

But I digress ... at the peak of my powers, I wrote a bit about a Marketing Executive having women wearing dresses from Gliebers Dresses in a television commercial with Colbie Caillat's "Brighter Than The Sun" playing in the background. Just a throwaway line in a story about corporate stupidity.

Two months later, Chicos released a commercial with two women wearing Chicos clothing ... with Colbie Caillat's "Brighter Than The Sun" playing in the background.

Odd coincidence, don't you think? Here's the link. I mean, they read my content most days ... I had the data to prove it.

These moments were lost to the digital scrap heap of history ... until an agency used by Chicos reached out, asking me to update a link in the post to reflect the current URL of their website.

If you are paying an agency $$$ to ask the agency to spend time talking to an analytics blogger about a "broken link" from a post that is thirteen years old, you should probably ask yourself if you've lost the plot. Your job is to generate business today, not spend time asking an analytics blogger to correct a link from a thirteen year old satirical post.

P.S.:  Just thought you'd want to see Chico's home page. Show me the love of merchandise displayed here.

This One Is Missed ... By Everybody

Sure, some clients have a seasonal business (i.e. gardening) that requires different logic. But for everybody else?

I've talked about this concept for nearly twenty years ... and when I analyze your data, it's obvious nobody listens.

Nobody.

Here's an example. The graph below shows the number of newly acquired customers by month.

We see the obvious signature of a company that "doesn't get it". This brand goes for the low-hanging fruit. This brand acquires customers when the fish are biting ... November and December. Low cost of acquisition. Everybody raises a toast to a job well done.

One problem.

It's not a job well done.

Here's a graph of customer value over the next twelve months, by acquisition month.

Customers acquired in December are worth $42.84 in the next twelve months.

Customers acquired in September are worth $58.83 in the next twelve months.

Just as important:

• Twelve-Month Rebuy Rate of Customers Acquired in December = 32.5%.
• Twelve-Month Rebuy Rate of Customers Acquired in September = 39.3%.

I first observed this trend in (checks notes) 1995.

Why does this happen?

When you acquire the customer in September, the customer is "recent" for the highest response months of the year (October, November, December). The customer is likely to convert to a second purchase quickly.

• When you acquire a customer in December, the customer is "recent" during a dormant response period (January / February) ... by the time October/November/December roll around, the customer has lapsed and is less likely to repurchase.

If you want to see if a company is "smart", observe their customer acquisition efforts in September. Are they doing things that seem unusual or run contrary to industry best practices? If so, they've learned the secret to customer acquisition.

P.S.:  If you want to understand why your annual rebuy rate isn't great, check to see if half of your new customers are acquired in November/December. If the answer is "yes", you have a business disconnect ... you are acquiring Christmas buyers then trying to sell them Spring/Summer/Fall stuff ... that's a disconnect.

Do You Measure The Categories New Buyers Purchase From?

Many of the secrets of your business are buried deep in merchandise/marketing reports that simply do not exist. The modern digital world could care less about the products a customer purchases.

You, meanwhile, need to care deeply about what a new buyer purchases, because as it turns out, you are setting your business up for either long-term success or the alternative. Be mindful of what you are doing.

Here are twelve-month rebuy rates for first-time buyers based on the merchandise category the customer bought from in a first order. The categories are dummied-up to protect the innocent.

• Category 01:  36% Rebuy Rate.
• Category 02:  29% Rebuy Rate.
• Category 03:  31% Rebuy Rate.
• Category 04:  27% Rebuy Rate.
• Category 05:  27% Rebuy Rate.
• Category 06:  37% Rebuy Rate.
• Category 07:  32% Rebuy Rate.
• Category 08:  37% Rebuy Rate.
• Category 09:  30% Rebuy Rate.
• Category 10:  33% Rebuy Rate.
• Category 11:  34% Rebuy Rate.
• Category 12:  39% Rebuy Rate.
• Category 13:  35% Rebuy Rate.
• Category 14:  37% Rebuy Rate.
• Category 15:  23% Rebuy Rate.
• Category 16:  28% Rebuy Rate.
• Category 17:  29% Rebuy Rate.
• Category 18:  33% Rebuy Rate.
• Category 19:  40% Rebuy Rate.
• Category 20:  34% Rebuy Rate.
• Category 21:  37% Rebuy Rate.

For this brand, the two most popular categories just turn out to be two categories that attract spectacular customers ... Category 12 and Category 19. In Nordstrom terms, those would be "casual apparel" categories.  Look at Category 15 ... that would be like a Home category (towels, bedding etc). 

One of the valuable lessons I learned back in the early 1990s at Lands' End was that categories that had narrow appeal were terrible categories to acquire customers in. You wanted the new Womens Casual customer because she'd buy Womens Casual and Womens Tailored and Kids and Mens Casual and Mens Tailored and Home. Her long-term value was better because she was pre-disposed to buy from most of our categories. The Home buyer? Nope. The customer had a narrow interest and consequently, low long-term value.

Nobody listened, of course, but it was such a valuable lesson.

This brings me to you. When you are out there paying tolls on Facebook, are you making sure that you attract customers who love your entire assortment (i.e. high-value prospects) or are you just paying for anybody (i.e. low-value prospects)?

You run this analysis for your business, right?

If you don't run it, what stops you from running it?

Yes, I'm building a case toward something ... if you've made it this far, you're one of the smart ones!

How Do You Know It's Working Properly?

About six months ago one of you reached out to me to tell me that you were having "wild success" via a fusion of AI and customer relationship management. The individual said "we don't know what it's doing, we just know that as of today it works."

#reassuring

Then you have Grok going ... well ... nuts on Tuesday (click here - gift link from the NY Times).

You can't through a large language model on LinkedIn without it hitting some pundit who has no mathematical training telling you how wonderful AI is. Sure it is. You don't have to know anything and can have AI do your job. Fun!

When it comes to customer relationship management, and you're trying to squeeze money out of your loyal customer base, please explain to me how exactly you know that the AI you are using "works"? Be specific, especially those of you who don't have mathematical training. How do you know that the customer relationship management decisions that you've outsourced to AI are the "right" decisions? How will you know when your vendor-trained AI solution goes off the rails like Grok did today?

Problem #1 With Digital Marketing

FYI - yesterday's quiz apparently sent some of you to the unsub button. It's not my fault you don't know the answers to the questions ... that's on you!

On to today's topic.

Here's actual data, showing the twelve-month rebuy rate of newly acquired buyers based on how many items were purchased in a first order. Tell me what you observe.

Customers buying just one item have an approximate 30% chance of buying again in the next year.

Customers buying multiple items have ever-increasing chances of buying again in the next year ... nearly a 40% chance for those with three items purchased.

I know, I know, this is the point in the program where you tell me that you have an automated AI-infused cross-sell and up-sell program. Good! Now why the heck does it do such a poor job?

Your AI-infused program might not be doing a bad job. Your source of new customer traffic might be responsible.

For instance, look at these results from recent work:

• New Customers via Catalogs = 43% purchased multiple items in a first order.
• New Customers via Email Marketing = 44% purchased multiple items in a first order.
• New Customers via Google = 33% purchased multiple items in a first order.

Repeatedly, I see instances where the marketer goes for the easy win ... paying Google/Facebook to do the heavy lifting ... those channels are doing heavy lifting ... they're identifying customers who want a specific item at a specific point in time. Those channels have no responsibility to send you a quality prospect, they are responsible for sending you ANY prospect. You don't want ANY prospect.

It's your job to identify prospects who want to buy from your full assortment, both today and in the future.

Do you see the difference? It's an alignment issue ... your marketing efforts are not aligned with subsequent success efforts.

When I measure companies with low long-term value, it's frequently because of the decisions marketers made 1-3 years ago to acquire easy-to-find customers who want an item at a point in time instead of acquiring hard-to-find customers interested in a relationship where they buy from your full assortment multiple times.

New Customers

A few years ago I analyzed a business that was struggling with new customers (duh). Upon digging into the information, another issue revealed itself.

• The customers the brand acquired STUNK. They were lousy customers.
• The brand didn't always acquire lousy customers ... the brand changed their marketing strategy and the customers they now paid Google for were not "customers", they were "Google Users" who had a need at a point in time and Google facilitated the transaction.

This isn't the only brand that has problems. In the post-COVID era, there are all sorts of acquisition nightmares taking place. Some of this is facilitated by the easy nature of modern digital marketing. Marketers know the creative and subject lines and offers that attract customers. Marketers have NO IDEA whether the customer being attracted is worthwhile. None. Modern digital reporting is notoriously bad at helping marketers understand what they are doing.

So, let's ask a few questions. Count how many times you answer YES.

Question #1:  Do you know the percentage of new customers who purchase 2+ items in a first order?

Question #2:  On the acquisition order, do you know if your new customers prefer new merchandise more than existing merchandise?

Question #3:  On the acquisition order, do you know if your new customers prefer winning items (best sellers) over hard-to-find items?

Question #4:  On the acquisition order, do you know if your new customers prefer higher price point items than are preferred by your loyal customer base?

Question #5:  On the acquisition order, do you know if your new customers prefer full price items or discounted items?

Question #6:  Do you know if September is a better month than December to acquire a new customer?

Question #7:  Do you know how much worse customers acquired from Google/Facebook are compared to other sources, in terms of future value?

Question #8:  Do you know which merchandise category delivers new customers with the best future potential?

Question #9:  Do you know the percentage of new customers who will repurchase in the twelve-month following a first purchase?

Let's grade your efforts.

• 6+ Yes Responses = You are a very smart marketer and likely know more than most of your peers.
• 4-5 Yes Responses = You are likely an average marketer, good job!
• 2-3 Yes Responses = Talk to your analytics team and get some answers.
• 0-1 Yes Responses = Oh oh.

If you answered "Yes" to only 0-3 of the nine questions, please follow along in upcoming days because issues you have could be connected to your level of knowledge regarding the customers you are acquiring.

Buc-ees

Recently somebody emailed me and said "where have all the customers gone?"

They're at Buc-ee's, founded in 1982, expanding in 2025 like there is no tomorrow.

Let me just start by saying that I thought it was a tad inappropriate to take a picture of the restroom (for obvious reasons) ... but the stunned look on my face when I walked in ... I mean, this is Making America Great Again. I've been in some filthy latrines in all sorts of Shell / BP / Amoco stations this year. I mean, red/green led lights to show you if a bathroom stall is being used? I get it, your CFO will tell you that you don't make money on a modern restroom. Your CFO needs to stop talking.

As you drive in, you notice that no semi-trailer trucks are allowed. None. There was a Loves right across the freeway and Buc-ee's says "you can have those customers, we don't want 'em". Meanwhile, you're taking every customer Facebook will allow you to pay for. Heck, we even saw truckers walking a quarter mile from their rigs to visit Buc-ee's.

The gas pumps ... all three hundred of them (I have no idea what the actual number is, it felt like 300, it wasn't) were generally being used.

Cars packed the parking lot.

Inside, the store is busier than a 1990 Mall the Saturday before Christmas.

Many readers work for apparel brands. You want to know where your customers are? They're inside this store in Amarillo! I walked off the square footage ... 3,000 square feet dedicated to apparel, until my wife told me I missed a section ... 4,000 square feet. 2/3rd the size of a mall-based store. My home town just leveled a mall ... it's time for apartments ... meanwhile, Buc-ee's is reinventing apparel retail.

"But Kevin, I just want to get a bag of Doritos after getting gas." Ok, have at it. They have Doritos. But they prominently feature THEIR in-house brands ... and they merchandise a lot of products!

You'll also find a jerky bar, a candy bar, and essentially an entire restaurant paired with performing employees.

Can I ask you a question? Do you post your salaries anywhere / everywhere for anybody / everybody to see?

The Assistant Food Service Manager is making $80,000 a year.

One of those "strategic leaders" on LinkedIn messaged me about a job paying $180,000 a year, wondering if I'd be interested? The "strategic leader" needs to look at what Buc-ee's is paying a GM and re-evaluate ... well ... just about everything. I mean, if I have to hear one more person tell me that "nobody wants to work" or "young people just don't want to work" ... it's just cruel. It means your work environment does not attract top-level talent. Either your culture stinks, your leadership stinks, you aren't paying enough money, or some combination of all three is true. Look in the mirror.

The people in the Buc-ee's store were working their living butts off ... they had no choice, because customers were just opening their wallets and throwing money at 'em.

Businesses with a heritage that pre-dates e-commerce all decided to jump off the omnichannel deep end ... tethering old with new, forcing sameness everywhere, offering tepid products that are perpetually available and always 30% off or more, focusing entirely on discounts/promotions for success while constantly throwing money at Google/Facebook for customers that have well-below average lifetime value. We called this a "best practice". We were so dumb.

Walk into a Buc-ee's and see what real leaders were doing while we spent decades aligning channels. My goodness.

P.S.:  This is where many of you email me and tell me the reasons why Buc-ee's is "wrong". Here's my email address:  kevinh@minethatdata.com

Accountability

A couple of interesting things I heard in the past month.

1. It's not my fault, our merchants stink.
2. It's not my fault, my industry is dying (looking at you, catalogers).
3. It's not my fault, the CFO asked me to stop spending so much money.

Merchants always stink ... and merchants are frequently brilliant. They have a HARD job. When they fail at their job, it is YOUR job to optimize their failure.

Industries always die. Horseshoeing was a burgeoning industry at one point. In every dying industry, there are winners. Why aren't you a winner in a dying industry?

CFOs always try to reign in spend. It's their job to protect cash. When the CFO takes your budget away, it's your job to optimize what you "can" do. Leverage all the marketing that doesn't cost you anything. There's this channel called YouTube just waiting for you to build an audience. Get busy!

You are accountable. Yeah, you! It may not purely be your fault that your merchants stink, but it most certainly is your fault that you didn't do anything about it.

Doing Something Different

On a recent Supper Club Tour of Wisconsin, one notices all sorts of interesting things.

Yes, I said "Supper Club Tour". Your state doesn't have Supper Clubs. Wisconsin does. People line up outside of dive restaurants at 3:45pm to make sure they get a seat at McGregor's Blink Bonnie.

When you smell the sizzling steak being served ... when you see the smoke wafting nearby, you understand.

Stuff like garlic toast ... sets one place apart from another.

Bakeries serve peanut squares/cake. Ohhhhh boy!

Ishnala, the top Supper Club in Wisconsin, serves five hundred Old Fashioned drinks ... PER DAY! They expect to sell nearly 100,000 OLD FASHIONED drinks this season, at $9.50 each that's nearly a MILLION dollars a year ... on ONE DRINK! You have stores that don't do a million dollars a year selling six hundred styles.

We were told that Ishnala serves six hundred people per day. Our wait was 2 hours 25 minutes on one visit, 2 hours 49 minutes on the second visit.

There were three common themes across our seven-day Supper Club Tour of Wisconsin.

1. Merchandise (i.e. food ... like sizzling steaks with smoke filling the restaurant at McGregor's Blink Bonnie). Good food matters. A lot.
2. Scarcity that forces people to line up well before the restaurant opens because seating is limited. Why accommodate everybody then sit empty most of the time when you could have limited seating that forces people to line up at the door before you open?
3. A "hook" ... something that sets one apart from everybody else.

I'm sure I sound Old Fashioned (see what I did there), but we've kind of lost the plot in the past fifteen years. You see all the YouTubers doing things differently, you go out in the real world and see all these businesses doing things differently ... then we sit here and think to ourselves about how many tepid channels we can sell tepid products in at 30% off??

P.S.:  I frequently think about scarcity these days and how the omnichannel era ruined our businesses by demanding that all products be priced the same in all channels and are constantly available. Wrong! Look at soccer - especially now in the United States. When an MLS team used to share a stadium with an NFL team and put 27,000 people in the stadium it looked like the stadium was 2/3rd empty (it looked that way because it was 2/3rd empty). When an MLS team erected a purpose-built stadium that seated 23,000 fans, you had a sellout and 4,000 people who could not get in. The former situation is an "omnichannel" solution that makes the brand look unloved. The latter situation is a sellout!

P.P.S.:  It only makes perfect sense that if you want to make your email marketing program a robust one that "works", you'd use it to advertise the products that you only bought a few hundred units of ... then you create FOMO via email marketing (and social, the concept would work even better there) that the customer must act now or the items will not be available.

• Try it with a clearance item ... you have 200 of 'em left ... tell the customer that they're at 50% off and they'll be gone in an hour unless the customer acts now. Try it and see what happens. Don't be a Lemonhead!

Uh Oh

It's fifteen months after The Lemonhead was hired.

The results? They aren't good.

• Net Sales are down 12%.
• Comp Segment performance is up 4%, strongly suggesting that existing customers like what the brand is selling.
• New/Reactivated buyer counts are down 25%.
• Loyal buyer counts are down 5% even though The Lemonhead implemented a brand new loyalty program nine months ago.
• The Executive Team didn't earn an annual bonus, and that's a problem because the VP of Operations wanted to buy a new BMW.
• The Marketing Team has been gutted ... a team of eight individuals has been replaced by eleven individuals (three new people to manage the loyalty program) ... three employees from the old regime and five hand-picked mini-Lemonheads hired by The Lemonhead.

Four months later, an announcement is made by the CEO ... "The Lemonhead" is going to leave the company to spend more time with his family. The CEO thanks The Lemonhead for his service and for modernizing marketing efforts. At the same time, the Chief Merchandising Officer is taking a new role with a new line of business that focuses on "the digital customer" (i.e. the Chief Merchandising Officer has been demoted). The CFO will move to a new role to support this new line of business (i.e. she has been demoted).

If you think this story is a parable about modern marketing situations, trust your instincts.

The Damage Is Done Before The Results Are In

The Lemonhead has a playbook, tried and true, tested under the most intense of circumstances. 

It's the exact wrong playbook for 90% of brands, likely including the brand you work for.

The Lemonhead believes in Customer Loyalty. Of course he does ... he worked for a multi-billion dollar brand that sold addictive products on a daily basis ... so of course his formula of applying a loyalty playbook on your brand who sells sundresses that the customer only needs 1x or 2x per year will "turbocharge" your brand.

The Lemonhead immediately ends wasteful "customer acquisition" tactics, saving the brand a fortune. "WHY ARE WE DOING THIS?" The Lemonhead screams. Of course, this angers the long-term employees who know that without new customers the brand will never had loyal customers. The Lemonhead labels these employees "Luddites" ... "THEY DON'T GET IT!"

The Lemonhead celebrates three months in charge with a p&l that looks spectacular. Sales are roughly flat, maybe down a percent or two ("THE MERCHANTS DON'T GET IT!"), but profit is surging.

Everybody in Leadership is pleased with the results.

Several key employees on the marketing team elect to leave the company ("I'm not working for this stupid lemonhead"), taking a ton of institutional knowledge with them.

The damage is done before the results are in.

Next, we review results a year later.

The Lemonhead

This is a marketer (male, female, it doesn't matter) ... you've met this person countless times.

Your company is performing acceptably ... maybe you do $75,000,000 in annual sales, you've been growing at a 3% rate ... not great, but better than others. Then, somebody makes a mistake. It's often the CEO, though many on the Executive Team fall prey to the same logic ... they interview a Lemonhead.

By now you should be wondering what a Lemonhead is.

It's the unique person who is both a force of nature and is a moron. The kind of person who worked at Starbucks in 2005 when they were printing money ... the person had nothing whatsoever to do with their growth plan of putting three stores on a downtown block, but took full credit for it in subsequent job interviews. The kind of person who says that customer loyalty is "paramount" to success (yeah, people love hearing vapid nonsense like that). The Executive Team or CEO or Owner or Board are easily seduced by The Lemonhead.

That's when The Lemonhead begins a "transformation" project. More on that tomorrow.

Goat Yoga

Apparently it is a thing.

Before it was a thing, explain the best practice that existed that suggested that Goat Yoga would be a "thing"?

If you answered "there was no best practice", you are likely correct.

By the way, I asked ChatGPT to draw a picture of a person enjoying Goat Yoga. It came up with this. Apparently the fun part of Goat Yoga is AI envisioning that the goats stand on top of each other.

Always remember that when a marketing professional tells you that something is a "best practice", it likely wasn't close to a best practice when it was created and quite likely was something that practitioners sneered at.

File Power

I go through phases where I spend a lot of time talking about File Power. Then I go through phases where I read marketers babbling about nonsense ("your customers simply aren't engaged in today's complex media ecosystem") and I'm inspired to reintroduce the topic.

Let's put this in the simplest terms possible.

Say you have 100 customers. In the next year, 30% will buy again, spending $200 each.

Meanwhile, you acquire 70 new/reactivated customers each year, each spending $100.

Here's how you generate business:

• 100 Customers * 0.30 Rebuy Rate * $200 per Repurchaser = $6,000.
• 70 New/Reactivated Customers Spending $100 Each = $7,000.
• Total Sales = $6,000 + $7,000 = $13,000.
• Next Year's 12-Month Buyer File = 100 * 0.30 + 70 = 100.

This business is at an equilibrium point. As long as Merchandise Productivity and/or Marketing Productivity and/or Creative Productivity don't change, the business will generally book $13,000 per year and 100 customers per year.

This is the point in the story where the company hires a new CFO, and the CFO thinks the brand is spending too much money on marketing ... "our ROAS is too low"! The CFO demands that the brand spend less. Most of the marketing spend aligns with new/reactivated customers, but some of it causes existing customers to repurchase. The marketing team carries out the wishes of the CFO. Here we go:

• 100 Customers * 0.28 Rebuy Rate * $200 per Repurchaser = $5,600.
• 50 New/Reactivated Customers Spending $100 Each = $5,000.
• Total Sales = $5,600 + $5,000 = $10,600.
• Next Year's 12-Month Buyer File = 100 * 0.28 + 50 = 78.

We've arrived at the penultimate moment in the discussion. The year prior, we could expect 100 customers to generate $6,000. This year, we can expect 78 customers to generate $4,680. The brand lost $1,320 of "File Power". If the brand elects to reverse the decision made by the CFO, sales do not return to prior levels.

• 78 Customers * 0.30 Rebuy Rate * $200 per Repurchaser = $4,680.
• 70 New/Reactivated Customers Spending $100 Each = $7,000.
• Total Sales = $4,680 + $7,000 = $11,680.
• Next Year's 12-Month Buyer File = 78 * 0.30 + 70 = 93.

Even when the brand reverses direction, sales do not get back to prior levels, and customer counts are short of where they used to be.

This is File Power.

The decisions you make today have a lasting impact. They don't just impact 2025, they impact 2026 and 2027.

Catalog Review

I'm going to have some time in August for something different. Normally, I analyze catalog businesses via actual customer transactions. Those projects are a bit more costly ($15,000 to $30,000 ... as you already know).

If you'd like me to look over your existing reporting and existing segmentation for the past several years to see what trends I can identify ... and how those trends impact the future, contact me (kevinh@minethatdata.com). This would be a week-ish (timeframe) review and would cost considerably less than the normal month-long project that you're familiar with.

Making a Delicious Omlette

Last month I told you about Fallow.

Today, I share with you one of their videos ... how to make an omelette like a chef.

First of all, I followed the instructions ... and the omelette was SENSATIONAL! My goodness. I was enthralled with the folding process ... you fold the omelette by one-third, then fold the remaining two-thirds over the top of the one-third, and then you turn it over, hiding any sins associated with the folding process. Just like that the omelette has five layers (egg / filling / egg / filling / egg), which makes it both fluffy and elegant at the same time.

They teach you how to do this, for free.

They teach every competitor how to do this, for free.

They don't lack for business. They are using Customer Media Marketing to fill their restaurants.

What is the parallel for your business? Discuss.

Northwestern Steak House

In Mason City (Iowa) there is a century-old restaurant that has the formula for success nailed down. The restaurant? Northwestern Steak House (click here). It's not located in a modern building ... or a large building.

They break rules. You cannot make a reservation until 4:30pm of the day you want to eat, and guess what? If you make a reservation, you'll eat late, because there is a line outside the door. On the day of our visit, the line formed at 3:45pm.

When you enter at 4:30pm, you are pointed to a table. By 4:31pm (I checked on my watch), the restaurant is full ... those still in line are asked to go to the upstairs lounge where they can enjoy a beverage and wait for a 5:45pm - 6:00pm seating.

Our order was taken at 4:37pm. By 4:50pm they were taking reservations for 8:00pm.

They serve the classic tiny salad with pickle wedge and hard boiled egg ... in this case with French Dressing ... the same salad they served me in the late 1980s.

Why do people keep coming here? They serve a buttery Greek mixture that they pour on top of the side of pasta or rice you get with your meal (along with some parmesan cheese) - they also serve the buttery greek mixture with your steak. It's to die for!!

By they way, that's the petite filet pictured ... the walleye had to be the size of Lake Erie.

They embrace tradition ... same food they've served for decades, they have a hook that is different than everybody else (buttery Greek mixture), and they break rules by not taking reservations until they open ... meaning they have a line out the door that forms at 3:45pm.

What is the "hook" that makes your business special?

Is there a way to ignore the omnichannel nonsense of always having inventory in stock in all channels in an effort to create urgency?

I mean, this business is 100 years old and they're packing the place. Your business has traditions, right? Use 'em to your advantage!!

P.S.: One of the blatant errors of the omnichannel era was the concept of having products always available, in all channels, at all times. There are times when that is a valuable concept (i.e. you have a check engine light and the Ford dealership has your part in stock). But there are times when you need to sell out of something valuable ... quickly ... and the customer needs to know that, prompting the customer to act immediately.