This one person tells a story about this webshop that a.o. sells rucksacks. An online marketing agency that does their marketing, selling the rucksacks at a Google-cost of €20,- per sale. And that is well within the target of – to break even – €25,-. Unfortunately, over 80% of the rucksacks are returned afterward (reason largely miscellaneous). Now, the cost isn’t €20 per sale, but €36,- per sale: An €11,- loss per rucksack.
The story continues. The specific situation is uncovered by the customer, per accident. It’s escalated to the higher management of the agency. They sit down to talk with the customer, who isn’t a marketer. This marketing agency insists that they have made great campaigns, and they have done their job well. Knowing of the fact that 80% of the rucksacks are returned and a net loss of €11,- was made per rucksack. Of which they have sold dozens. Not even mentioning consultancy and operational costs here.
Wow. How did this happen?
I owe this story to a friend, who worked at this agency at the time and told me about this happening within his company.
After listening to the story, I replied that these kinds of customers are the exact reason that I hate the market environment we’re in with online marketing, at this time.
There’s this huge lack of knowledge with most companies, for the simple fact that marketing is changing so rapidly. They just buy something that has a great sales pitch which earns trust. To the customer, it’s very hard to distinguish good and bad performing companies.
I believe that if you’re in the business of making things better by making better things, your biggest competitor is the ignorance of your customer.
You need to educate them.
Instead of selling to them and hoping they will never find out that your product is crap. Hoping they never get educated.
Let’s compete with quality, instead of sales tactics.
It’s definitely better to sell things that we can be proud of.