Who's paying attention to your unit economics?

An analysis of your customer's behaviour patterns, is vital if you are going to measure the performance of your marketing efforts.

Firstly a quick heads up - this Thursday, I will be recording a podcast with Daniel McCarthy, who is an Assistant Professor of Marketing at Emory University’s Goizueta School of Business.

He's the guy that pretty much invented customer-centric unit economics - a methodology that allows companies to calculate their value based on predictive customer behaviour.

If you are interested in radically improving the accuracy of your marketing efforts or care about building a company that's fit for purpose in the 21st century, then I'd suggest you grab yourself a copy of the recording once we post it.

If you have a burning question that you'd like us to ask Daniel about CLV, CAC or anything related to better understanding customer-centric metrics - please get in touch with me with that question.


Understanding how your customers are behaving is critical knowledge to have at hand when crafting strategy for an organisation.

Alarmingly, research suggests that between 40 - 60% of first time customers that are acquired by a business through their marketing efforts - only end up transacting with that brand once.

In other words - lots of money is spent on attracting and acquiring a huge cohort of customers who then never end up even repaying the budget that was spend on getting them in the door in the first place.

Apart from obvious problems like poor customer service or a product that doesn't deliver on its promise, the primary problem here is that the customer that was acquired wasn't a good one.

By consistently attracting poor customers, brands are therefore ignorantly doing business that is actually costing them money.  

You can tell who these bad customers are by making use of unit economics, but even the companies that have this kind of data don't always have a culture where the information is used at executive level to inform strategy.

This is crazy, and prompts the questions - who exactly is looking at the unit economics of your business? What actions are taken as a result?

An analysis of your customer's behaviour patterns, presented on a real-time dashboard, is vital if you are going to accurately measure the performance of your marketing efforts.

Without it you are literally throwing money into a dark hole and hoping that it'll land somewhere favourable.

As a strategist and somebody who helps companies create great strategy - I strongly urge my clients to invest in dashboards that give them this kind of feedback as they invest millions in the future of their brands and businesses.

Some of the most successful companies that I have worked with used their customer insights very effectively (at the executive level) to fine-tune their marketing strategies and get far better returns on how they engaged with the marketplace.

This is exactly why all digital transformations must be coupled with a cultural transformation, as well as leadership development, to be successful.


Strategy | Jon Cherry
Jon Cherry is a trained foresight practitioner and strategy facilitator, advising brands on how best to win the future.