Kevin Hillstrom: MineThatData

Read this (click here) ... after reading this small amount of text, you'll have an understanding (not necessarily fully accurate but that's not the point) of the life of this shark.

I share this with you because this is what you'll have to do in the age of AI ... AI is going to write better than you. You and I have to clearly, simply, beautifully compete with technology. If we don't, we lose.

One can make a strong argument that as AI consumes jobs, an increase in artistic jobs fill the void. Writing is a noble artistic job.

        

Back in the day at Nordstrom Mens Apparel was a "high crossover" micro-business (category).

What does that mean?

It means that a Mens Footwear customer was willing to buy Mens Apparel next.

It means that a Mens Tailored customer was willing to buy Mens Apparel next.

It means that a Womens Apparel customer was willing to buy Mens Apparel for her husband on a next purchase.

It means that a Cosmetics customer was willing to buy Mens Apparel on a next purchase.

High crossover categories are prime candidates for email marketing. You want customers early in the life cycle to crossover into as many micro-businesses (categories) as possible - the odds of future purchases increase meaning that lifetime value increases.

Email marketing isn't some mindless "set it and forget it" program. It requires thoughtful consideration. Do the small things that lead to customers who are likely to purchase more often.

        

We've been evaluating micro-businesses ... your business is comprised of dozen(s) of micro-businesses. Each of those businesses possess different dynamics.

Sometimes there is an overriding relationship. For instance, this business is represented by a graph ... the x-axis is the rebuy rate of customers buying again from each individual micro-brand (category), the y-axis is annual net sales for the micro-business (category).

In general, one could fit a line through the dots ... if a micro-business (category) retains more customers, it generates more net sales. Sort of a #duh. Snoozer.

Except for two things.

Look at the category with an approximate 7.8% rebuy rate ... but generating about $11,000,000 a year. That shouldn't happen ... that micro-business should be somewhere around $6,000,000 a year. Why so high? High price points. The category has high prices, which artificially lower rebuy rates ... but the customers who do purchase spend a lot more, resulting in a good outcome.

Look at that data point with a rebuy rate > 14%. This micro-business has as loyal of customers as any category, and yet sales are awful. Why so low? Because the category does not attract customers outside of its own micro-category. Yeah. Customers like this category, but customers who do not buy from the micro-category DO NOT LIKE this category and won't buy from it, greatly limiting the potential of the category.

There's a lot of secrets in your business ... go look for them ... then develop marketing plans for each micro-business (category).

        

Allow me to simplify the message. Here is a brand that has seventeen categories. One of the categories is Gifts. Here is how the micro-business generates sales.

• 18% from last year's Gift Buyers.
• 15% from last year's buyers, no Gift purchase last year.
• 67% from new/reactivated buyers this year.

• 4% from last year's Pet Accessory Buyers.
• 20% from last year's buyers, no Pet Accessory purchase last year.
• 76% from new/reactivated buyers this year.