Yesterday we observed a business where Management decided to discount heavily in an effort to overcome lousy comp segment results. When I'm asked to evaluate businesses for Private Equity, this is a common finding. There are all sorts of tricks ...
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Kevin Hillstrom: MineThatData

Quiz Week: Question #4

Yesterday we observed a business where Management decided to discount heavily in an effort to overcome lousy comp segment results. When I'm asked to evaluate businesses for Private Equity, this is a common finding. There are all sorts of tricks Management attempts when trying to make a business appear healthy.

Today, we'll look at annual comp segment results for the past four years. Tell me what is wrong with this business.


Comp Segment Performance: Existing Items
  • 2026 = -11%.
  • 2025 = -2%.
  • 2024 = +8%.
  • 2023 = +12%.

Comp Segment Performance: New Items
  • 2026 = +3%.
  • 2025 = -20%.
  • 2024 = -24%.
  • 2023 = -10%.

        
 

Quiz Week: Question #3

Yesterday's business suffered from low merchandise productivity. Customers liked the merchandise less than the year prior. The marketing department continued to spend money finding new/reactivated buyers in an effort to keep the business steady. It's really important for marketing to do what can be done when customers simply don't like the merchandise being offered.

Ok, today we're going to look at two different dimensions within comp segment performance. Can you tell me how Management decided to respond to what was happening within this business?


Comp Segment: Items Selling At/Above Their Historical Average Price Point.
  • Sep: -27%.
  • Aug: -24%.
  • Jul: -22%.
  • Jun: -12%..
  • May: -17%.
  • Apr: -13%.

Comp Segment: Items Selling Below Their Historical Average Price Point.
  • Sep: +33%.
  • Aug: +29%.
  • Jul: +25%.
  • Jun: -10%.
  • May: -11%.
  • Apr: -10%.

        
 

Quiz Week: Question #2

Yesterday we explored a business where the marketing department elected to cut back on customer acquisition. We can easily detect this issue by looking at comp segment results (which were consistently positive). When comp segment results are positive and new/reactivated comps have a shift in performance at a specific point of time, we look to the marketing team ... because their change in marketing investment caused the business challenge observed.


Here is today's quiz question: What is wrong with this business?


Comp New/Reactivated Buyer Counts:
  • Sep: -3%.
  • Aug: -5%.
  • Jul: +2%.
  • Jun: - 1%.
  • May: +3%.
  • Apr: +4%.

Comp Segment (Those With Exactly Two Purchases In The Past Year) Results.
  • Sep: -8%.
  • Aug: -7%.
  • Jul: -9%.
  • Jun: -6%.
  • May: -9%.
  • Apr: -8%.

        
 

Quiz Week: Question #1

This week we're going to cover comp segment results that frequently arise in my work. Your job is to diagnose the reason why the business is succeeding or failing.



Question #1: Here are comp new/reactivated comps, and comp segment results ... for the past six months. What is the likely cause of this business not meeting expectations.

Comp New/Reactivated Buyer Counts:
  • Sep: -22%.
  • Aug: -18%.
  • Jul: -30%.
  • Jun: +13%.
  • May: +11%.
  • Apr: +8%.

Comp Segment (Those With Exactly Two Purchases In The Past Year) Results.
  • Sep: +6%.
  • Aug: +8%.
  • Jul: +5%.
  • Jun: +7%.
  • May: +3%.
  • Apr: +9%.

Based on what you see here, what is the reason this business did not meet expectations in recent months? What would cause a business to exhibit the comp new/reactivated buyer and comp segment results you see here? What would you do to fix the problem?

        
 

8%

Here's a gem.



I've been working in corporate America for more than thirty-eight years. The number of blank stares I've received when suggesting an A/B test when the person on the other side of the conversation is a ROAS believer ... well, it's a staggering number of blank stares!

A/B tests are humbling. They force you to address your personal marketing belief system. It's been my experience that not many professionals want to address their personal marketing belief system.