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.

The Peak of the Omnichannel Era, in One Simple Graph

Nordstrom became a private company several weeks ago. I saved the multi-year trend of their stock price. What year was the peak of the "omnichannel era"?

If you answered "2015", trust your instincts.

From 2016 and beyond, the loss of traffic in stores became untenable.

• It was too easy to buy online.
• Amazon absolutely mulched everything in their sights.
• Generational shopping differences cut off younger customers from older brands (I'm looking at you, Macy's).
• What I now call "Customer Media Marketing" began to take shape in this timeframe.

I was in meetings in this timeframe with retail brands ... Executives were furious that store traffic was SO BAD ... they'd bark at the Online Marketing Director that thirty years of store presence caused the online channel to succeed, not a banner ad on a shady website where the marketer couldn't possibly track down the bad players who were siphoning marketing dollars from the brand. They'd spend all this time trying to attribute (sound familiar) online sales to the store that likely "caused" the online order.

Eventually, CFOs figured out it was all nonsense, they told the world that square footage was untenable in the modern world, and the omnichannel movement ended.

Our world evolves, in an unending manner.

• Startups need funding from VCs.
• VCs need to get paid via IPOs.
• Banks lend when Publicly Traded brands fail to grow or need to grow in an expensive manner.
• Private Equity scoops up the remnants when brands begin to die, allowing banks to get paid while not having to publicly publish failures anymore.
• Private Equity (sometimes) loads the brand up with debt, pumps the numbers, and then sells to a "less smart" buyer, who is left holding the bag.

The secret to success in business is to not be the person left holding the bag.

Sometimes Consultants See Things ...

There are times when several of you within a vertical hire me in a similar timeframe (thanks to ChatGPT for framing the situation).

These instances were far more plentiful twenty-five years ago. In the catalog world, your list broker knew what your competitors were doing, and they couldn't tell you what your competitors were doing. If they ever let anything slip, they were done.

Talk to these folks AFTER you leave a vertical (i.e. apparel or home), and yeah, you realize how blind every single company is. You also realize the absolute genius that every single company possesses.

There are "genius situations" happening in 2025. Work your network over, and figure out what is happening. Business challenges frequently lead to genius solutions. Some of you are cooking with gas right now!

Beachwaver

Website (click here).

TikTok (click here).

Beachwaver TV (click here).

Under ten second video of guy in the distribution center packing products (liked 73,000 times). When is the last time you bothered to say anything about Ralph and Charlene in your distribution center? If you think it is hard to get employees to work (#peoplewontwork), how much easier might it be if those employees are featured in your marketing efforts?

Ambassador Community (click here).

This sure smells like Direct Response Marketing. Yet it is different, isn't it? This looks a lot like Customer Media Marketing.

Also - it bypasses traditional search/social ... the model ultimately uses the organic nature of each channel to benefit the brand. Yes, they're paying the gatekeepers ... but it isn't the core of the business model, is it?

An Imbalanced Ecosystem

Back to our working hypothesis.

If you think about Customer Media Marketing as a YouTube / TikTok / AI centric video/search platform fused with Community, you immediately see that "traffic" has to flow into those avenues and ultimately flow out of Direct Response Marketing.

This flow out of "traditional search + traditional social" creates an imbalanced ecosystem.

Think about it this way ... pretend you have 100 customers in the old ecosystem. 10 of the 100 customers leak out into YouTube / TikTok / AI, leaving 90 customers in the old ecosystem. The marketer notices that response is 10% worse because the marketer spends money but 10% of the traffic is "gone", driving down ROAS, driving down profitability.

The marketer has two responses here.

The marketer likely notices that certain responsive keywords are "more expensive" ... and they are more expensive because every other marketer decides to go after the responsive keywords, de-emphasizing low performing keywords. The competition is good for the old ecosystem, in that the old ecosystem has pricing authority, but is bad for the marketer, who now pays more and gets less.

As long as the marketer fails to realize that Customer Media Marketing is "a thing" ... a fusion of Video / Community / AI ... problems exist in the p&l. If the marketer is "advertising dependent" (and many of you are), performance is bad, the top-line contracts, and most importantly, it becomes terribly hard to find new customers because customers have leaked out of the old ecosystem into the Customer Media Marketing ecosystem.

The imbalances in the old ecosystem will correct over time, but the correction process can be painful.

Many of you (look at your new customer counts) are dealing with this correction process.

P.S.:  If you want to see an example of a company dealing with this correction process, read this email message ... show me where the merchandise is? Or the community? Or video? Or any way to create awareness?

• In their defense, they are directing you to Insta and some of their Reels have a reasonable number of views. They're leveraging a decade-old style of social. Better than not leveraging it, sure.

P.P.S.:  Back in 2007 one of the commenters on my blog mentioned that big/old companies were too stupid to leverage social media properly and they'd be DEAD in a few years (emphasis on dead was hers). No brand dies quickly unless there is a ridiculous level of financial mismanagement. Instead, brands die very slowly, they participate in an imbalanced ecosystem that drains their blood one drop at a time ... for a long time.

The Four Pests Campaign

For whatever the reason, I wasn't aware of this "Great Moment in Political Leadership" (click here).

• If you kill the sparrows, considering them a "pest", you might not realize that locust populations will grow, creating an even bigger problem.

In the late 1990s and early 2000s, I carried this book with me to most meetings (#nerd).

The book was a dense mathematical exploration of the interconnectedness of different biological situations. If you had an area with 10 wolves and 200 rabbits and somebody killed 100 rabbits, seven wolves would starve to death, leaving you with three wolves, causing the population of 100 rabbits to grow to 500 rabbits (because there weren't enough wolves to eat the rabbits).

That same level of interconnectedness is happening in modern marketing ... specifically, Customer Media Marketing.

As customers leak out of Direct Response Marketing, there isn't enough "food" for Direct Response Marketing. This causes marketers to spend more on the customers that remain, not even knowing that fewer customers remain, driving down the performance of their marketing efforts. All of a sudden people are lamenting the cost of clicks and grumbling about "Facebook being dead".

Eventually, the lack of "performance" causes marketers to look for other ways to reach customers (pushing them to Customer Media Marketing), transforming Direct Response Marketing. I mean, in 2000 we thought that Digital Marketing was fundamentally different than Direct Response marketing ... in 2025 we know they are essentially similar. Customer Media Marketing seems different today. Who knows how we'll view it in 2050?

Regardless, marketing concepts closely relate to biology and ecology. We're heading down an interesting path with both AI and Customer Media Marketing changing the "ecosystem" we belong to.

Nearly 400,000 Views Later ...

About once every five years, something I write "goes viral".

This week's blog post (click here) was converted to one that should draw LinkedIn attention. It did, with more than 380,000 views as of the time of this writing (here it is), making this post one of my top five in terms of views/impressions of all time. For me, 380,000 is "viral". Your mileage will vary.

• 380,000 views.
• 94 comments, nearly all from people not remotely connected to me, a handful quite salty ... like randos driving by your vehicle, pelting it with tomatoes.
• Three (3) individuals asked to connect to me on LinkedIn, total.
• No business inquiries (obviously, that could change).

It is far more important to connect with the "right" 350 people on an appropriate topic to 350 people than it is to "go viral".

An Imaging Issue

I asked ChatGPT to create an image of a CEO yelling at an Executive Team for creating a drawing of a person with three arms. This is the image ChatGPT created.

Back in 2010 I consulted with a retail brand. The brand brought in a crusty marketing consultant ... a guy in his mid-60s who had seen everything and consequently "knew everything". I presented a slide showing that the brand needed to greatly increase the investment in paid search ... having left Nordstrom three years prior, I knew exactly what a brand generated when it took $36,000,000 in catalog marketing expense and converted it into $18,000,000 in paid search spend yielding a sales increase.

I finished presenting the slide.

The crusty consultant went off, describing how stupid it was to pay for "keywords".

• "Are you telling this room of seasoned professionals that they should stop mailing a 64 page catalog featuring more than 350 products, and instead pay $0.50 four million times for the phrase "functional goretex?" Lunacy, Kevin. Lunacy. 

In the afternoon session, we obtained a document from the digital marketing team, showing the top 100 keywords, the investment in each keyword, and the sales associated with each keyword.

1. "Look at this, Kevin. We invested $10,000 in the term "Softshell", generating $25,000. What do you want them to do, spend another $5,000? What happens if nobody else searches for the term? What happens if they search for the term and they lose money? You don't run a business with analytics and keywords. You generate sales with a catalog, Kevin. You know better. This is the kind of advice you're giving people? 

The crusty consultant was essentially mocking the image that AI generated above. He couldn't see the future.

If you can't see the future via the image at the top of this post, you are the crusty consultant I described from 2010. A fusion of AI, Community, and Video is coming. Unavoidable. Already happening. While I think AI is going to muck up a ton of brands while greatly benefiting others ... while making dumb people look smart ... and getting dumb people fired in the process ... I still am not stupid enough to think this is the future.

And how the heck do we know if AI was / was not in on the joke in the image it created?

Being Replaced by AI is Delayed ... For Now

You know about my diminishing returns relationship.

I asked ChatGPT to create an answer to a diminishing returns relationship. It figured out the diminishing returns part. It didn't figure out a credible answer. For now. The credible answer is clearly on the horizon. So is a whole lot of change to ecommerce.

Ready?

To estimate next year’s sales based on your advertising investment, let’s analyze the return on ad spend (ROAS) from previous years:

Last Year:

• Ad Spend: $50,000

• Sales: $200,000

• ROAS: $200,000 / $50,000 = 4.0

This Year:

• Ad Spend: $100,000

• Sales: $300,000

• ROAS: $300,000 / $100,000 = 3.0

The ROAS is decreasing as spending increases, which is typical due to diminishing returns.

To predict next year’s sales with a $150,000 ad spend, we can estimate ROAS will continue to decline. If the ROAS drops linearly:

• Change in ROAS: 4.0 → 3.0 (drop of 1.0 when increasing spend by $50,000)

• If it continues, the next $50,000 increase may bring ROAS down to 2.0

Projected Sales Next Year:

• Estimated ROAS: 2.0

• Ad Spend: $150,000

• Projected Sales: $150,000 × 2.0 = $300,000

Alternatively, using a weighted average ROAS:

• Total past spend: $50K + $100K = $150K

• Total past sales: $200K + $300K = $500K

• Average ROAS: $500K / $150K ≈ 3.33

• Projected Sales: $150K × 3.33 = $500,000

Conclusion:

Depending on how you model ROAS:

• Conservative (diminishing returns): ~$300,000

• Average performance: ~$500,000

Let me know if you want a more precise forecast using regression or another model.