Recession

It's time for you to be a Leader.

It's not time to hunker down. It's time to start thinking.

Every one of you should have your Comp New/Reactivated customer count reporting and your Comp Segment reporting at your disposal ... monthly at minimum, weekly if necessary. If you don't have the reporting available to you, send me a message (kevinh@minethatdata.com) and I'll produce a special run for you ... just $1,800 for first-time participants, $1,000 per run thereafter.

If a recession comes to fruition, what will it look like? Let's look at Comp New/Reactivated Customers.

Look at January/February in the table above. That's what a real recession looks like assuming comparable year-over-year marketing spend. If you cut back on marketing spend, you just make it that much worse. I realize you've been taught to cut back on marketing spend during an economic downturn. You're just amplifying the problem if you do that (though you might be more profitable in the short-term ... you harm yourself in the long-term).

Recessions show up first among the customers least likely to embrace your brand ... new/reactivated customers, to be specific. Those are the customers (prospects) who ignore you first when times get tough. You'll know right away if a recession is going to impact you, and you'll have an indication of the depth of the potential recession immediately. What you see above is a catastrophe. This business generated tepid increases in new/reactivated customers for nearly two years ... then? Womp womp. 

• A Mild Recession?  -3% to -8% compared to your baseline. If you were already -10%? Then expect to be -13% to -18%.
• A Banger of a Recession? -15% to -25% compared to your baseline.
• Then you make it worse by cutting back on marketing spend, which is typically the "best practice" and is almost universally the wrong thing to do. Spend the marketing money to clear out products without discounts/promotions, and you acquire a customer in the process.

New/Reactivated customers are the canary in the recession coal mine. Measure the living daylights out of Comp New/Reactivated Customers and Comp Segment Customers (measuring those with exactly two purchases in the past year, quantifying how much those customers spend in the next month).

From there? Be a Leader. Smart companies find ways to not hunker down ... they figure out how to keep new customers flowing while everybody else hunkers down, giving them a huge advantage when the recession ends. We saw this in 2002, we saw it in 2010.

P.S.:  Well run business frequently evade recessions. I say this to offer you hope. You're smart, you're well prepared. There's few things more gratifying than posting a +2% on comp new/reactivated customers while everybody else is -14% ... and then continuing to post a +2% comp when everybody else cuts back on marketing spend and -14% becomes -29%.