The "Optimal" Answer

We read a lot about obtaining the "optimal" solution.

There is no such thing.

Let's review an old-school catalog marketing concept of an "optimal" solution. We have an individual customer worth $100 in the next year, with a 40% organic percentage and a 30% profit factor. The company currently sends 16 catalogs a year at an average of 80 pages each. The paper industry nuked this business, causing them to "re-evaluate everything". Smart people.

So they run scenarios for everything from 0-24 contacts per year and 16-160 pages per contact. Which solution is "optimal"? Take a look.

The green cells are the most profitable cells. Sending 24 catalogs @ 160 pages each is clearly not the optimal strategy.

But there are dozens of answers that all similarly optimal.

• 24 contacts / 16 pages = $6.20.
• 11 contacts / 48 pages = $6.00.
• 8 contacts / 72 pages = $6.14.
• 6 contacts / 120 pages = $6.51.
• 5 contacts / 160 pages = $6.82.

Their current best practice is 16 contacts / 80 pages which yields $4.93 profit. Which isn't optimal.

But the choices that are "nearly optimal" are diverse and require significant consideration.

• Do you contact the customer every ten weeks with large catalogs, 800 pages a year?
• Do you contact the customer every-other-week with tiny catalogs, 384 pages per year?

If you seek the "optimal" answer, you'll miss out on a lot of options. The two options mentioned above require different thinking, don't they?

There is no "optimal" answer. None. There are good answers, and there are consequences associated with good answers. Seeking an optimal answer means you don't want to think about what the future could hold with slightly different outcomes that lead to very different tactics.

Multichannel 2.0?

Here you go:

It's always interesting when this stuff crosses my desk. At some companies, Leadership creates an environment where employees feel comfortable trying things.

At other companies, nobody wants to take a risk ... but employees want to sound smart. These are the companies that gobble up the stuff in the image above. All the buzzwords are used. If asked to implement anything, these employees stall out ... quickly. They have no foundation under the buzzwords.

Build the foundation first ... the rewards come later.

More Pickleball

For the longest time, the "best practice" in pickleball was to hit a drop shot on a third shot. This video (click here) shows you the evolution of a point where the third shot is dropped over the net into the "kitchen" or "non-volley zone".

And then a Mom/Daughter duo changed the game ... applying what is called a "third shot drive" paired with a "shake and bake" where the partner aggressively attacks on a fifth shot. Watch this video for an example.

When you play tournaments here in The Valley, you'll see how the Mom/Daughter duo changed the game.

• Players 60 years old and older play a style that relies on the third shot drop.
• Players 59 years and under play a style that generally relies upon the third shot drive paired with a shake-and-bake.

If you are me ... and you've been taught to rely upon a third shot drop ... well ... it is really uncomfortable to be stuck in a tournament playing somebody with the drive / shake-and-bake strategy. It completely takes you out of your comfort zone.

I bring this up because this happens in marketing all the time. Older generations do what historically worked, younger generations create new styles of marketing that flummox older generations.

• I can't tell you how many meeting rooms I've been in where a fifty-something leader squelches the creativity of the 31 year old marketer.

When the world changes, change with it. Try not to impose the tired line of "that's the way we've always done it." Give a young employee a chance to change what you've always done.

The Email Addressed To Me Asked About Influencers

The Marketing Executive said this:

• "We decided to try an Influencer program. Within a week we had sales and profit, and then nothing. We asked our agency, 'do we have to do this every week?'"

If that's the kind of customer you want to chase ... one who doesn't remember who you are nine minutes after ordering from you because Hailey told her 429,000 Instagram followers to do so ... then yeah, that's what you have to do.

You earn the customer base you deserve.

• If you pursue influencers, you will have customers who don't care about you.
• If you partner with Google, you will have customers who have a relationship with Google that results in a purchase, but you don't necessarily "own" the customer (and I know, you're going to send me email messages saying that nobody owns the customer, so fine).
• If you partner with Facebook, you will have customers who have a relationship with Facebook and Politics, but not necessarily with your brand.

Do what is right for your business. If you don't, you'll still have a customer base, but somebody else will have determined who your customer base is.

Inflation

By now many of you raised prices, and you've witnessed the impact higher prices have on your customer base.

You know that for every "x%" increase in prices your annual rebuy rate changes by "y%".

You know that "x%" price increase yields a change in new customers of "z%".

You know how much inflation impacts average order values, orders per year, items per order, correct?

Give me a holler if you don't know the answer to this question and we'll figure it out together! kevinh@minethatdata.com

Digital Marketing

Look at this image.

Grade the marketing strategy here ... A = Best, C = Average, F = Worst. Pretend you are the EVP of Brand Marketing for Verizon. Do you feel like this is a quality representation of the brand you are responsible for? Is this the best use of your marketing dollars?

If your answer is "no", why do you let this happen?

P.S.: I realize that somebody is going to respond and say "we tested this and this tactic works best". That may be true ... within the confines of this discipline. I'm asking a different question.

Choose One

a) You do the hard work of building your own e-commerce brand.

b) You sell on Amazon and let them do all the work, and they get a lot of your profit as a consequence while you become a vendor for Amazon.

Which solution would you choose? Pick only one. Then discuss.