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Sales or Profits?

Analytical Culture

Seems the previous post (Best Seller Gone Bad) really hit home for people; perhaps we should drill into  this a bit.  So:

1.  Is the impact of your work evaluated against Sales or Profits?  (example)

2.  Do you think this evaluation approach is correct for your job and company?  Why? 

3.  Would you change this evaluation method if you could?

4.  What is holding you back from trying to make this change?

Personally, I always choose Profits if I can; the leverage is so much higher than Sales.  It’s much easier to generate $5 in Profits than $5 in Sales for any given $1 in budget, because there is generally so much waste in the Marketing system.

Update: OK, how about answering this question – when your work performance is evaluated, what percentage of this measurement is based on qualitative factors?  quantitative factors?

Best Seller Gone Bad

Customer Experience, DataBase Marketing, Marketing thru Operations

Electronic keyboards were expensive in the 80’s and early 90’s, especially good ones.  Then came Casio, and the whole business changed.  At HSN, we loved the electronic keyboard business.

The category was made for TV shopping – the demonstrations were killer, and with all the new-fangled automation on board, “anybody can play the keyboard”.  In HSN language, “keyboards screamed” and you always got a call center “whoosh” – the sound you hear when inbound calls ramp from 100 to 1000 in 30 seconds.

So I’m talking with the keys merchant, and he says they’re having a supply disruption, and there will be challenges keeping the keys in stock because they sell so well.  This is a problem for me, because I’m publishing the monthly customer (offline) magazine and we’ve got some layouts and articles on the product.

I ask for a simple merchandising run on the SKUs to get a feeling for product in pipeline, to see if maybe I have to kill the spread.  We’ve sold 45,000 of the little beggars, which is pretty good for (what was then) a $500+ item.  It averages about $1,000 a minute in Margin, which is great versus network overhead cost of $300 per minute.

Problem is, we’ve only ever purchased 17,000 of them.

Continue reading Best Seller Gone Bad →

Visitor Retention Mapping

DataBase Marketing, Driller Q & A, Measuring Engagement, Newsletters, Web Analytics

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Q: The research folks in my company are trying to convince me that measuring sessions and Page Views per Session is more effective than using Recency and Sessions, as you advocate in your book, for a retention metric.

A: For a content site, the Page Views / Session measure can be used as a measure of visitor quality and appropriate marketing to the right audience – a customer acquisition idea – not retention. And it really needs to be broken out by Source – the average has little actionable meaning. You want to know the Visitor Sources, and then look at this metric by Source. This is still Frequency though – what about visitors who don’t come back?

Q: I am having some difficulty in making a decision regarding this. They want to give me a matrix with Page Views per Session on the Y axis and Total Sessions on the X axis as the “customer retention map”.

Continue reading Visitor Retention Mapping →