This content was published in the No Best Practices newsletter on 5.1.2022.
This is part four of the “How To Destroy Your eCom Business” series, aka what not to do to build a healthy customer file. We’re covering common business decisions that appear to pay off in the short term, but make it harder to succeed in the long term.
Reminder: a healthy customer file enables a business to succeed today, but it also sets a business up for success in the future.
The last newsletter covered the risks of brand repositioning, which is one of two strategies that many companies will pursue when growth stalls out in the core business. This time we’re going to cover the other popular strategy: “growing” by investing in retention.
Investing in retention goes by many names, because there are many avenues for technology vendors and consultants to profit from this strategy. When brands talk about investing in personalization, they’re investing in retention. When brands focus on leveraging customer data, they’re investing in retention. And when brands invest in the “omnichannel experience” they’re investing in retention.
While this strategy is popular with large heritage retailers, it’s just as popular with a certain type of “career hacker” making his or her way up the eCom food chain at smaller brands. You can use this approach to produce what appear to be strong results for a few years…until the bottom falls out and the business tanks. But your “career hacker” has long since moved on by then.
This newsletter is especially important for founders with light experience in marketing. If you can’t spot this pattern, you’re vulnerable to exploitation, straight up. Don’t worry, I’m going to cover the full “marketer-operator vs careerist weasel” dichotomy in a future newsletter.
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