Why is pay for performance (PPP) so hard to apply to customer retention marketing?
The answer to this question is pretty simple - and it has nothing to do with difficulties in implementation. The real reason is the gravy train. Loyal customers are the gravy train for every company and who wants to share the gravy train with a pay for performance agency? Very few.
Think about it - acquisition work is hard and risky. If 2% of the market responds to your offers let the agency take the losses on 98% of their efforts.
However, when you have customer segments that buy every week or every month regardless of what you send them (you know 75% order rates on your RFM segments) - why would you strike a pay-for-performance deal with an agency for those customers? Most marketers don't - and they have plenty of good reasons for saying no - but the simple answer is - you can't afford to gave away the gravy train.
www.iangilyeat.com
Think about it - acquisition work is hard and risky. If 2% of the market responds to your offers let the agency take the losses on 98% of their efforts.
However, when you have customer segments that buy every week or every month regardless of what you send them (you know 75% order rates on your RFM segments) - why would you strike a pay-for-performance deal with an agency for those customers? Most marketers don't - and they have plenty of good reasons for saying no - but the simple answer is - you can't afford to gave away the gravy train.
www.iangilyeat.com








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