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The BIG Ticket: Nike’s DTC Lawsuit and “Sunk Costs”

Hi! 

“Premium Week” seems to have been a hit with you. 

So I will spend some time today and tomorrow, mapping out a few other ideas. 

One that has been floated to me is the idea of a technology week. 

I’ll leave this one up to you. 

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Today, I want to take a look at a lawsuit filed against Nike that my dude, Mike Sykes, wrote about in his newsletter, “The Kicks You Wear”. 

The Kicks You Wear

The Kicks You Wear, Vol. 410 — The dirty on DTC 👀

Goooood morning, folks! Welcome back to the Kicks You Wear. Thanks so much for rocking with me today. Appreciate you…

Read more

41 minutes ago · 1 like · Mike D. Sykes, II

Mike talks about Nike’s failed DTC strategy. 

The reported lawsuit talks about:

  • The strategy failing early
  • Numbers being off the books
  • Cutting out distribution partners

And, more. 

I won’t spend a lot on the details. 

You can read those. 

I just want to highlight a few things that you can consider as you make your plans for your next launch or sales promotion:

  • Direct to Consumer seems like a great idea, but the numbers are tough. 
  • Personalized emails are another form of BS that is floated all too freely. 
  • Sunk costs are real. People keep throwing good money after bad. 

Actions you can take:

1. Start small and work your way up. 

Nike bet big on personalized emails and a D2C strategy. 

From the looks of things, they went all in without testing these ideas. 

I do this regularly. 

Instead of launching a product or idea to your entire list or market, maybe test it on a sample size of 100, 1000…whatever makes sense for your market. 

Test and repeat. 

2. Know your numbers. 

Know what success will look like. 

Know what you are willing to invest before you pull the plug. 

Understand what the milestones on your path will look like. 

Don’t just throw big dollars or large resources at something and keep going because you have already invested “so much.” 

If it ain’t working. 

Stop. 

Look around. 

Is it something you can fix? 

Something you can change?

Something you should stop? 

Let me know what you think. 

Hit reply.

Dave


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