Momente të shkëlqyera në historinë e të gjithë kanaleve

 

Subscriptions

More than a decade ago I worked with an e-commerce startup. You could buy their products online, or you could sign up for a subscription, allowing you to continue to receive products on a monthly basis.

My job was to evaluate the subsequent behavior of a subscription customer vs. a classic e-commerce customer.

• The e-commerce customer bought +/- 3 times per year, had a reasonable repurchase rate, and continued to buy +/- 3 times per year moving forward.
• The subscription customer? The customer bought for three consecutive months ... unsubscribed ... then just disappeared. No/Few subsequent purchases.

You should have seen the mortified look on the face of the Owner - I met him in Seattle for lunch, to go over the results of the analysis. He looked like somebody slapped him in the stomach with a pickleball paddle. He realized, quickly, that he simply accelerated all purchases that would be spread out over time into a short window, got a sugar high for his efforts, and then immediately needed new customers or he was finished.

A year later, his business was finished.

It isn't easy to do, but a good subscription program accelerates purchases without dissuading subsequent activity. The best subscription programs capitalize on perishable goods that must be replaced. You need 5G to make your iPhone work, so you keep paying for it. You don't necessarily need to keep eating pretzels with specialty mustards.

It's $690 For a Brown Scarf

Yeah, take a look.

Do you have any idea how hard it is to get a customer to pay $690 for a scarf?

In a world where you can pay $9.99 for a perfectly credible scarf delivered in just hours, it is infinitely hard to accomplish this task.

And yet ... somewhere, there are marketers who convince their target audience that this is a perfectly good use of customer funds. And don't tell me "well, those are rich people so the rules are different" because yes the rules are different, but you still have to convince the customer to spend the money that way vs. an infinite number of ways that rich people can spend money.

You'll find a thousand vendors who will help you figure out how to use technology to offer the exact right discount at the exact right time to the exact right customer.

You'll find virtually nobody who is able to convince a customer to pay $690 for a scarf.

I just wonder how much we've all been deluded by third parties to chase the lowest-common denominator?

Judy, Jennifer, Jasmine

Back in 2012 I put together a popular series about three personas ... Judy, Jennifer, and Jasmine (click here). So popular, in fact, that I was invited to speak at a conference in New England about the personas (here's the agenda for those of you who enjoy nostalgia). These were heady times ... you didn't need to bring $20,000 to the agency running the conference to be able to address the entire audience like many conferences require of their speakers today. Keep that in mind as you think about the NRF's "Big Show" that is coming up (yes, somebody sent me the pitch deck they received for how much people have to pay to play there .... that's what modern conferences are all about ... you are most assuredly not getting brilliant insights from the best and brightest, you are getting content from people paying for access to you).

Thirteen years later, the personas have aged.

• Judy = 72 years old.
• Jennifer = 56 years old.
• Jasmine = 40 years old.

Judy is the catalog-loving shopper ... notice that she's been retired for seven years. If you manage a catalog brand and Judy is still your customer (she would have been 42 years old in the era of J. Peterman on Seinfeld), project her spending levels into the next decade as she enters her eighties ... then project your paper/printing/postage costs, and you're in for a scintillating exploration of the Darwinistic principles of Capitalism.

Stunningly ... Jennifer is nearly Judy's age from that presentation in 2012. And she behaves nothing like Judy.

When I gave the presentation in 2012, the audience audibly groaned when I introduced Jennifer. They ... did ... not ... like ... her ... at ... all. Which is too bad, because today these brands realize they NEED Jennifer. They need to know who she is, they need to know what she desires. The time to start knowledge exploration was back in 2005. The second best time to do this was back in 2012. 

The third best time to start is today.

P.S.:  There are some in this audience who strongly believe in certain marketing tactics. Let's ignore tactics for a moment. Answer the following two questions for each individual below ... first, how much disposable income does each individual have, and second, what needs does the individual have that you are able to meet with your current merchandise/product assortment?

• Judy, 72 Years Old.
• Jennifer, 56 Years Old.
• Jasmine, 40 Years Old.
• Jadyn, 24 Years Old.

The answers to your questions should be telling, and should inform you of what you need to do in 2025 and beyond to be relevant.

Weighted Email Attributes

I'll use my headphone hobby as an example.

Weighting (you'll develop your own weighting scheme based on a regression model).

• 0-12 Month Purchases = 100% Weight.
• 13-24 Month Purchases = 60% Weight.
• 25-36 Month Purchases = 35% Weight.
• 37-48 Month Purchases = 20% Weight.
• 49-60 Month Purchases = 12% Weight.
• 61+ Month Purchases = 7% Weight.

Let's say a customer purchased two times.

• October 10, 2024 = $200 on in-ear monitors, $140 on a dac/amp.
• May 1, 2021 = $800 on open-back headphones.

Weighted spend:

• In-Ear Monitors = $200 * 1.00 = $200.
• Dacs/Amps = $140 * 1.00 = $140.
• Open-Back Headphones = $800 * 0.20 = $160.

Weighted percentages:

• In-Ear Monitors = 200/500 = 40%.
• Dacs/Amps = 140/500 = 28%.
• Open-Back Headphones = 160/500 = 32%.

On the surface, the customer spent 800/1140 = 70% of historical spend on open-back headphones.

Because the open-backed headphone purchase happened a long time ago, the purchase isn't weighted as heavily ... so it's "relevance" is 32% of past purchase activity.

You'd market all three categories to the customer, given that weighted history is mostly equal. And yes, you'd correlate historical weighted percentages with future activity to "know" that the weights are relevant.

Regardless, use weighted email attributes to personalize your assortment to each individual email subscriber.

Two Clicks

There's a nice hierarchy in email marketing.

1. Segment buyers by the Elite / Loyal / Quality / Average / Struggling / Lapsed framework.
2. Segment email subscribers by Inactive / 1 Click-Through Past Year / 2+ Click-Throughs Past Year / 1+ Email Purchase Last Year.

Overlay (1) by (2) and you have something!

Regardless how many email campaigns you send per week (or per day) clicking through two campaigns in the past year is a meaningful metric ... those are the email subscribers you focus extra effort on.

You've Probably Done This Already ...

... but I sense some in the audience would appreciate a refresher course.

Test:

• Group "A" receives all emails in the next month (i.e. 25 contacts).
• Group "B" receives some emails in the next month (i.e. 10 contacts).
• Group "C" receives no emails in the next month (0), though I realize some of you find this unpalatable, so you could make it a small number (i.e. 4, one per week).

Results:

• Measure total spend after a month, at a customer level.
• Group "A" = $25.00.
• Group "B" = $23.00.
• Group "C" = $20.00.

Adjusted Results:

• We adjust for the fact that the customer would have spent $20.00 no matter what ... that's the organic amount.
• Compared to Group "A", your organic percentage is 20/25 = 80%.
• Group "A" = $25.00 - $20.00 = $5.00.
• Group "B" = $23.00 - $20.00 = $3.00.
• Group "C" = $20.00 - $20.00 = $0.00.

From here, we can fit the relationship with a power function.

And you now know the amount of incremental demand/sales you generate at each number of contacts in the month studied. Also, yes, I understand that your analytics guru thinks this is a poor way to design a test and then measure results. No worries. It's important to be in "do something mode" in 2025.