Picklemall

Many of you have forwarded articles to me outlining how your local mall is considering taking empty space and turning it into pickleball courts.

Here is one of the concepts, with a key investor being Steve Kuhn from Major League Pickleball. This concept is coming to Arizona Mills in Tempe (click here).

Name one omnichannel expert prescient enough to forecast that adhering to the omnichannel thesis would result in closure of stores, with the square footage being replaced by (checks notes) pickleball?

I mean, in the image, it looks like an entire dead anchor store is being replaced by pickleball.

By the way, if you've never watched pickleball online, watch the Major League Pickleball matchup headed to Southern Cali in two weeks. Crazy good play and energy (#jessieirvine).

Oh Look, Email Marketing Works

Here's a scenario I ran through our Marketing Budget Experiment framework. I simply ended email marketing for the next five years ... none of it whatsoever. What happened?

Oh my goodness.

The impact is multiplicative over time.

Top-Line Demand drops from $229 million to $191 million to $173 million to $149 million to $141 million ... the brand loses $272 million over five years. Woo-boy!

The profit hit is nasty ... dropping $11 million in year one, then $12 million, $14 million, $15 million, and $16 million.

Almost all of the buyers impacted are existing buyers ... down 218,000 five years from now (vs. just 8,000 newbies per year). Take away a key purchasing channel and these customers buy less often ... and they buy less often across all channels because of the dramatic loss of file power.

Rebuy rates? They fall from 49.7% to 37.0% five years from now. There are fewer buyers, and it's a weaker file of buyers.

Next time somebody grumbles about what you're doing with email marketing, put this scenario in front of them ... run it for your brand. Show the critic that s/he doesn't have the slightest idea what s/he is talking about.

And if you don't have the scenario readily available, contact me right now (kevinh@minethatdata.com ... https://blog.minethatdata.com/p/hire-kevin.html) and we'll get busy, ok?

Automation

This tweet (click here) reminded me of a call I received in 2016. 

The call was from a Chief Marketing Officer. He discussed his vision for marketing.

• "I envision being the only marketing employee. I'll sit behind a dashboard, clicking requests to computer systems and vendors who carry out my wishes. No employees. Just me. I can sell anything, and I don't need anybody to sell it."

This day is coming ... not in 2023, but it is coming. Digital marketing can be commoditized. Has been happening for 25 years.

Summer Schedule

As usual, my summer schedule will dial back just a bit ... maybe three posts per week instead of five, sometimes four, sometimes more.

And yes, we'll be focusing on Marketing Budget Experiments ... by the time we get to Fall, you'll need to run 'em to understand how to plan for 2024.

It's Time!

Four months goes by in the blink of an eye.

It's time for the next run of the MineThatData Elite Program. For just $1,000 ($1,800 for new clients) you get my standard suite of metrics plus analysis.

Our October run was the most popular run in program history (eight years), and from what many of you are telling me this run is going to be popular as well, given the difficulty of overcoming price increases over the past two years.

Contact me now (kevinh@minethatdata.com) and we'll get started.

Customers > $$$

Yesterday I showed you how profit increased with a 2.5% increase in rebuy and a 2.5% increase in spend.

• Year 1 = $3.8 million.
• Year 2 = $4.4 million.
• Year 3 = $4.8 million.
• Year 4 = $5.2 million.
• Year 5 = $5.6 million.

For the same company, instead of a 2.5% / 2.5% increase, let's go with a 5.0% / 0.0% increase. Rebuy gains also apply to new customer gains.

What kind of profit gains do we see here?

• Year 1 = $3.8 million.
• Year 2 = $4.7 million.
• Year 3 = $5.7 million.
• Year 4 = $6.6 million.
• Year 5 = $7.5 million.

Over the following four years this brand makes an additional $4.5 million by increasing rebuy rates more than increasing spend per repurchaser.

Always prioritize customers over spend per repurchaser. Both are important - yes - both are important. But you always want more customers.

P.S.:  Contact me now (kevinh@minethatdata.com) for your own Marketing Budget Experiments project (click here).

What Does A Sustained Gain Look Like?

In this Marketing Budget Experiment, we compare what happens when business is "as is" vs. a 2.5% bump in merchandise productivity via rebuy rates / new customers ... and a 2.5% bump in merchandise productivity via increased spend per customer.

You'll likely need to click on the image to see it properly.

The jump in rebuy rate and spend impacts profit increasingly over time.

• $3.8 million in year one.
• $4.4 million in year two.
• $4.8 million in year three.
• $5.2 million in year four.
• $5.6 million in year five.

Mind you - I didn't compound productivity gains ... they are 2.5% in response and spend for year one, then they are the same 2.5% each year thereafter ... no subsequent gains. But the impact is not unlike compound interest. You have more customers, those customers spend more.

Tomorrow we'll see how the business responds to a 5% increase in rebuy/newbies and a 0% increase in spend.