Case Study: An Email Correspondence

Maybe the most important finding in the past week is that "virtually nobody" is repurchasing when acquired by "Beans: The Internet's Only Variety Store!", regardless of merchandise category. Discovering the fact is one thing. Communicating the fact is quite another thing. And sometimes, the communication results in a reshaping of the message I convey.

This is why I send "tidbits" in my projects ... the back-and-forth interaction is useful and helps shape the outcome of the project.

From: Kevin Hillstrom <kevinh@minethatdata.com>
Sent: Monday, May 11, 2026 3:22 PM
To: Kevin Hillstrom <kevinh@minethatdata.com>
Subject: RE: FW: RE: FW: Repurchase Activity

Does Sloane have a point? Sort of. But the point doesn't change the fact that your customers have minimal future value.

If I measure repurchase activity over three years instead of one year, repurchase rates improve from maybe 18% to 33%. In that manner, Sloane is right.

Let's look at annual spend for customers acquired four years ago. Year1 = $10.68 in sales. Year2 = $6.92 in sales. Year3 = $4.08 in sales.

The story doesn't change ... the customers you acquire have virtually no future value when converting sales to profit. You have to generate a lot of profit on a first order to stay in business.

______________________________________________________

From: Paisley Ingram <paisley.ingram@beans.com>
Sent: Monday, May 11, 2026 2:56 PM
To: Kevin Hillstrom <kevinh@minethatdata.com>
Subject: FW: RE: FW: Repurchase Activity

Does Sloane have a point regarding a longer repurchase cycle?

______________________________________________________

From: sloane.montgomery@beans.com
Sent: Monday, May 11, 2026 10:39 AM
To: Paisley Ingram <paisley.ingram@beans.com>
Subject: RE: FW: Repurchase Activity

His experience is limited - those companies are too big to matter. $20,000? Highway robbery. I'll get you better answers from AI for minimal cost. Let's focus on the future, not an antiquated business model where some dweeb is paid a premium for something software can easily generate for free.

Ask Goober if customers have a longer repurchase cycle? I think he's looking at the issue the wrong way. Marketers are marketers for a reason, they're simpletons who are too narrow-minded to have the world-view you and I have to have to run a business.

______________________________________________________

From: paisley.ingram@beans.com
Sent: Monday, May 11, 2026 10:33 AM
To: Sloane Montgomery <sloane.montgomery@beans.com>
Subject: RE: FW: Repurchase Activity

He was part of the Management Teams at both Eddie Bauer and Nordstrom back in the day. We're paying him $20,000 for his work.

Also, we're breaking too many eggs. Sales are down 20% since your arrival. We can't survive if we go below $16 million in annual sales.

______________________________________________________

From: sloane.montgomery@beans.com
Sent: Monday, May 11, 2026 9:56 AM
To: Paisley Ingram <paisley.imgram@beans.com>
Subject: RE: FW: Repurchase Activity

First of all, who is this propeller-head you are working with? You can tell this Goober never worked for a real business, he's just out there wandering aimlessly in the Land of the Theoretical. How much are you paying for his "insights"?

Anybody with half a brain knows you don't measure lifetime value within twelve months. It's called Lifetime Value for a reason. You measure the Lifetime. That's what I'm working toward. And if we have to break a couple of eggs along the way, so be it.

______________________________________________________

From: Paisley Ingram <paisley.ingram@beans.com>
Sent: Monday, May 11, 2026 9:44 AM
To: Sloane.Montgomery@beans.com
Subject: FW: Repurchase Activity

 

FYI Sloane. 

Best,

Paisley

______________________________________________________

 

From: Kevin Hillstrom <kevinh@minethatdata.com>
Sent: Monday, May 11, 2026 9:12 AM
To: paisley.ingram@beans.com
Subject: Repurchase Activity

The analysis suggests that the future value of customers recently acquired is well below what I'd expect. Apparel Bottoms, Apparel Tops, and Outside are the three categories that do comparatively "well" ... even then, those categories deliver customers who spend just $11.00 on average in the next year (about $2.00 of profit after subtracting marketing costs). Fashion / Seasonal / Having Fun generate customers who spend about $8.00 or less on average in the next year (maybe $0.50 of profit after subtracting marketing costs).

This puts a lot of pressure on your p&l, because you have to generate a lot of profit when acquiring a new customer for your business to be profitable.

Thanks,

Kevin