Ready For Something Different?

If you aren't in my catalog audience, move on, we'll talk to you tomorrow.

Those of you in the catalog audience might be attending NEMOA (click here) on April 1, April2, and April 3. How about I contribute from three thousand miles away? I'll offer two keynote presentations.

1. April 2, 1:00pm EDT:  The State of Catalog Marketing. In this presentation, Kevin (that's me) will share with you an unbiased and honest view of modern catalog marketing, based on analysis of billions of purchase transactions over the past eighteen years of consulting work.
2. April 3, 1:00pm EDT:  The Future of Catalog Marketing. In this presentation, Kevin (me again) will share the end-game for modern cataloging. Some of you will like this message, because you've crafted a catalog program designed to survive the next ten years. Others need to look to a different and somewhat uncomfortable future.

Both presentations will be emailed to my subscribers (that's you) at 1:00pm on April 2 and April 3. You don't have to do anything ... other than watch each Keynote.

Mini-Project Opportunity

Let's try something. I have a brief hole in my calendar for the first week of April.

Some of you (in recent weeks) have mentioned to me that it feels like you are managing several different businesses simultaneously. Hint - you are! It gets hard to manage a half-dozen businesses that are loosely connected via "your brand". 

Here's what I'll do.

• Project Cost = $4,500. Virtually free.
• For every item customers purchased in the past year, I will create a "profile" of that item for you. I'll tell you the marketing channel that the item skews to. I'll tell you if new customers prefer the item, customers early in the customer life cycle prefer the item, or if loyal customers prefer the item. If you have zip code available, I'll tell you if there is a geographic preference for that item.
  
• Based on the item profile of each item, I'll create nine "mini-assortments" for you ... items that behave similarly across channels, customer behavior, merchandise categories etc.

Let's remove the hurdle of a more expensive Action Streams project. I have room for several of these projects in early April. Send me an email (kevinh@minethatdata.com) and I'll get this going for you. Offer ends March 21. Are you truly managing many different "mini-businesses" under one brand umbrella? Let's find out!! Hint - you are managing several small businesses simultaneously. The fact you are managing several small businesses simultaneously is the reason why you struggle to obtain reasonable customer response in any one channel ... you're trying to offer products that customers within a channel aren't thrilled about.

Layoffs / Downturns / Opportunity

The most February layoffs in sixteen years (click here).

My stock portfolio is down 10% in the past month.

Opportunity is rampant during a downturn, regardless of the cause of the downturn. Social/Mobile exploded after the near collapse of the global economy seventeen years ago. Modern (nimble) e-commerce brands flourished after being founded during COVID. Turns out it is fun to start a business while trapped in your home.

Yes, some of you are preparing to head into the bunker for awhile.

Those of you who capitalize on opportunities are doing the opposite. You're preparing for what comes next, and you'll be years ahead of the competition as a result.

Did you read the nonsense today from Macy's? Give it a read (click here). This is what heading into the bunker for awhile looks like ... sales declines and rampant contraction while praising a small number of stores that are essentially holding flat or are up a percentage point. Anytime you capitalize the phrase Bold New Chapter, you aren't launching a Bold New Chapter. "We're going to contract and then dress up our best stores a bit" sounds like logic used by Sears, doesn't it?

You might be preparing to launch your own version of a Bold New Chapter. This is a great time to do that. Don't tell anybody. Sneak up on folks and surprise them.

• P.S.:  In the February run of the Elite Program, I saw all sorts of signs of my clients turning the corner. They're not out there bragging about it. They're out there executing. They'll execute right through this coming downturn as well. Make something happen while nobody is paying attention.

Did You See How 2x - 3x - 4x - 5x Buyers Evolve?

Remember our graph from yesterday?

Once the customer purchases for the second time, the customer is ready to roll!

• 2x Buyer:  Quality to Average.
• 3x Buyer:  Quality to Average.
• 4x Buyer:  Mostly Quality.
• 5x Buyer:  Loyal to Quality.

Here's an important point ... the customer doesn't achieve Loyal status (in this case) until a fifth purchase. Even then, the customer is at Loyal status for one (1) month, that's it ... then the customer quickly slides into Quality territory.

I repeatedly see mistakes with businesses who try to push loyalty initiatives at customers who simply aren't even close to becoming loyal customers. Don't do that. Use Action Streams to nudge the customer along, ok?

How Much Worse are First-Time Buyers?

Much, much worse.

The secret to success in e-commerce is getting a customer to a second order. From there, the customer has significantly better long-term value.

Look at the blue line in the image above. These are first-time buyers ... even at the very moment the customer purchases for the first time, the customer only has a 23% chance of buying in the next year. From there, the customer continually becomes less responsive. This is why having a Welcome Action Stream is so darn important ... your odds of converting a first-time buyer are best at months 0/1/2/3 after a first purchase.

After a second purchase, the customer is reasonably responsive. In the image above, a 24 month 2x buyer is as responsive as a 1 month 1x buyer.

In my projects, I create Action Segments. For twelve-month buyers, here's what the segments look like:

• Elite = 75%+ Chance of Buying Again Next Year.
• Loyal = 60% - 74% Chance of Buying Again Next Year.
• Quality = 40% - 59% Chance of Buying Again Next Year.
• Average = 20% - 39% Chance of Buying Again Next Year.
• Struggling = 0% - 19% Chance of Buying Again Next Year.

It's easy to see that the first-time buyer starts in the Average segment, then quickly fades into the Struggling segment. You immediately need a Welcome Action Stream to prevent the customer from falling into Struggling territory ... at which point the newly acquired customer is already at risk of being lost.

Taking Advantage of the Plus Indicator

The 2x customer is at 7 months of recency, and has the following repurchase metrics.

• 35.2% chance of buying again in the next year.
• 3.0% chance of buying in the next month.
• Average Action Segment.

However, you send the customer an email campaign, and the customer clicks through the campaign. Yeah! Repurchase metrics change.

• 37.2% chance of buying again in the next year.
• 6.0% chance of buying in the next month.
• Average Action Segment.

The "Plus" indicator kicks in. You now have a few weeks to kick off an Action Stream to capitalize on the fact the customer visited your website.

Do you see how different this style of marketing is compared to typical marketing campaigns?

I'm not saying you shouldn't execute your marketing campaigns.

I'm asking you to complement marketing campaigns with Action Streams that capitalize on Plus/Minus customer states.

Taking Advantage of the Minus Indicator

Here's data for customers with two life-to-date purchases. We're measuring the probability of the customer buying in the next year.

The arrow is important ... that's where the customer slumps to a lower Action Segment. At four months of recency, the customer has a 39.2% chance of buying in the next year. The customer just dropped from what I call a "Quality" Action Segment to a "Average" Action Segment.

• 1 Month = 46.1% Rebuy Rate, Quality Action Segment.
• 2 Months = 43.2% Rebuy Rate, Quality Action Segment.
• 3 Months = 41.1% Rebuy Rate, Quality Action Segment.
• 4 Months = 39.2% Rebuy Rate, Average Action Segment.
• 5 Months = 37.9% Rebuy Rate, Average Action Segment.
• 6 Months = 36.6% Rebuy Rate, Average Action Segment.
• 7 Months = 35.2% Rebuy Rate, Average Action Segment.
• 8 Months = 33.8% Rebuy Rate, Average Action Segment.
• 9 Months = 32.6% Rebuy Rate, Average Action Segment.
• 10 Months = 32.0% Rebuy Rate, Average Action Segment.
• 11 Months = 31.1% Rebuy Rate, Average Action Segment.
• 12 Months = 30.4% Rebuy Rate, Average Action Segment.

At three month of recency, the customer is about to drop to a lower Action Segment. This is where the "minus" indicator kicks in, causing you to kick off an Action Stream to try to prevent the customer from falling to a lower-value segment.

Does that make sense?