Is A Smart Marketer Working At This Company?

Back to our Rolling-Twelve Month Analysis.

There are times when a smart marketer is trying to overcome core merchandising issues. This analysis offers hints of a smart marketer.

• Total Demand is flat in the past year.
• Total Customers are up in the past year.
• Spend per Customer is down $3 in the past year.

Smart marketers figure out how to grow customer counts when merchants suffer missteps (hint - all merchants suffer missteps - doesn't mean the merchant is bad, trust me, you'll know when you run across a bad merchant).

On an annual basis, I evaluate the productivity of twelve-month buyers and new/reactivated buyers.

This business has a rebuy rate problem. No, rebuy rates < 25% are not "bad", they are a function of what you sell. If the customer doesn't need what you sell annually, your rebuy rates will be low. Having said that, rebuy rates slumped from 23.9% to 19.2% over a multi-year period of time. It shouldn't be a surprise that as rebuy rates dwindle, price per item purchased increased.

Compared to a four-year average, rebuy rates are -9%, spend per repurchaser is +6%, the net of each is a -4% change in demand per inventory (rebuy rate times spend per repurchaser).

Customer productivity is down.

New/Reactivated buyer counts, however, are at a four-year high.

In other words, there is a Smart Marketer working at this company. The Smart Marketer figured out how to overcome a customer productivity issue via more new/reactivated buyers.

It should not surprise you that there are non-smart options out there. There are few things worse than a Lemonheaded Marketer who cuts back on marketing investment (which generally impacts new/reactivated buyers most) in collaboration with a short-term profit-focused Chief Financial Officer. Profit results frequently improve for a short period of time. The customer file contracts, and merchandise productivity is not addressed, resulting in a miserable second year.