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Kevin Hillstrom Profile picture
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14 Jun, 7 tweets, 1 min read
1 - This quote is misleading and true.

"Snapchatters spend 1.6x more than the average shopper across ALL Q4 shopping moments."
2 - I'm 100% confident that an analyst queried a database and found this outcome to be true.
3 - It's also a classic misread of a database.

Just because you can query a database doesn't mean you get accurate results. You write a query that is 100% correct and get a result that is bogus.

How so?
4 - I've done this for many clients.

Take your database, and come up with 100 attributes. Stuff like "Email Subscriber" or "Mens T-Shirt Buyer". 1/0 indicators.

Then query each indicator and see if the indicator shows that customers with that indicator spend more.
5 - The answer is almost certainly going to be "yes".

Why?

It's because of the structure of the query.

Best customers "do everything". As a result, best customers almost always align with the "1" or "Yes" portion of the query, and therefore, bias the query.
6 - If you don't believe me, test it out on your own data.

It's something that average and below-average analysts don't understand ... vendors seldom understand, and pundits almost never understand.

It causes so darn many inaccurate statements and bad choices to be made.
7 - Seriously - try it out for yourself and see what happens with your own data.

Questions?

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More from @minethatdata

Kevin Hillstrom Profile picture
15 Jun
1 - I've noticed that too few e-commerce professionals ... and almost no vendors (and it isn't their job to understand this) understand the fact that if few customers repurchase then the entire focus of the marketing department needs to be on customer acquisition.
2 - You'll miss this point if all you ever look at is conversion rates.
3 - Here's an example I just analyzed, with numbers scaled down to be easily understood.

The brand had 100 twelve-month buyers. 25% of those customers bought again in 2018. The brand then generated 70 new+reactivated buyers.

Next Years Buyer Count: 100*0.25+70 = 95.
Read 8 tweets
Kevin Hillstrom Profile picture
13 Jun
1 - Actual e-commerce customer data is indicating that the "COVID-bump" is ending.

This creates all sorts of interesting dynamics that are going to play out over the next two years.
2 - Let's pretend that we have a business where the annual repurchase rate is 30%, there are 70 new customers per year, and there were 100 12-month buyers at the start of COVID. Let's assume that each customer spends $100 a year for simplicity sake.
3 - So, at the end of the year just prior to COVID, we had the following situation.

100 buyers.

Rebuy Rate = 30%.

Existing Buyers = 0.30 * 100 = 30.

New Buyers = 70.

Total Buyers = 30 + 70 = 100.

Spend per Customer = $100.

Total Sales = 100 * $100 = $10,000.
Read 15 tweets
Kevin Hillstrom Profile picture
18 Apr
1 - The first portion of my consulting career (2007 to about 2013) was mostly spent working with catalog clients.

Now, most of you marketing via influencers might only remember catalog marketing from the J. Peterman character on Seinfeld.
2 - In the 2004-2007 timeframe catalog marketing began the process of "dying".

Now, I'm already bracing myself for the wolves who will come out and say that Amazon sends a catalog and that is proof that catalog marketing is alive and well.

It is not alive and well.
3 - I was invited to speak at a conference in 2007 ... a roundtable discussion on the future of catalog marketing.

It's hard to tell an audience of 300 people that there is no future.

I was invited to provide a "contrarian" view ...
Read 29 tweets
Kevin Hillstrom Profile picture
18 Apr
Person told me tonight they called a vacuum cleaner company from a work phone for a repair. This evening, he saw an ad on his home laptop on Facebook for the vacuum cleaner company.

Two things.
1 - This person was not happy that his vacuum cleaner stopped working.

Why this brand thought that an ad on Facebook would help matters is beyond me, but I'm not a digital marketing expert.
2 - Just because you can link/buy/sell information doesn't mean that you should link/buy/sell information.
Read 9 tweets
Kevin Hillstrom Profile picture
12 Mar
1 - When you focus on Customer Development, you look for key inflection points that cause customers to become more valuable.

Most companies have a customer rebuy rate table that looks something like this (some better, some worse).
2 - Read down the "Freq = 1" column. This is the probability of a first-time buyer purchasing in the next year, given that the customer hasn't purchased in "x" months (that's the column labeled "Recency").

Tell me what you observe, compared to the other columns?
3 - That column shows us just how unlikely first-time buyers are to purchase again.

This is a credible company with good repurchase rates (overall). But after a first purchase, the customer is not terribly likely to buy again.
Read 9 tweets
Kevin Hillstrom Profile picture
12 Mar
This applies to retail and e-commerce as well.

The other night on Clubhouse a guy gets invited to speak, and immediately begins the "RETAIL BRANDS ARE STUPID, THEY DON"T TAKE RISKS" mantra that vendor-centric folks leverage to sound like a Thought Leader. Just endless emptiness.
1 - Ok, let me share a story with you along these lines.

I spent one year (2000) working for a company called Avenue A ... one of the early inventors of the retargeting industry.
2 - We served a lot of retail brands, so it didn't surprise me that an employee wanted to spend a few hours learning how retail brands "worked from the inside".

So I spent time with the guy.

He took copious and detailed notes.
Read 23 tweets

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