We’re in peak marketing season, with under 30 days to go. Digital CPMs are rising, clearing spots at acceptable CPA is getting harder, email in-boxes are more cluttered than ever, and sales promotion is off the hook.
Nothing we haven’t seen before. But what should you–a multi-product retailer–be focused on? The answer is the same as it’s always been.
Customer acquisition. Not increasing repeat purchase rates, although that’s important. Not in increasing average order size, although that’s important. Customer acquisition is king if you want to grow. You’ve read–and have mastered–Byron Sharp’s “How Brand Grow,” right?
If not, stop right now, buy yourself an early holiday gift and read it tonight. At a bare minimum, read Dr. Sharp on the fallacy of the leaky bucket theory or this quick overview of some of the criticisms of his and the Ehrenberg-Bass Institute’s works.
The Double Jeopardy law says that you’ll build loyalty (repeat purchase) as you grow and get more of the category buyers. Pour your money into customer acquisition*, spread across as many channels as possible. But do the math first.
I stumbled upon a great presentation by Kevin Hillstrom, president of MineThatData, which shows you the kind of analysis you need to do. It makes clear why customer acquisition is so important. Read his presentation, available at SlideShare. You might want to hire him to look at your performance and assess your strategies and tactics.
Takeaways: Don’t get caught up in loyalty, NPS, and other things until you’ve got your customer acquisition strategy and tactics running full-speed, on many channels. Acquire customers to grow. Acquire customers to increase loyalty. And win.
*Decide where you want to cutoff acquisition at a source level. It could be break-even, at some minimally-acceptable ROI above your hurdle rate, or whatever. But make sure you understand and agree to those metrics with your executives, your marketing team, and your agencies.