Recency of Purchase An Important Factor

More often than not, marketing isn't about pretty pictures. It's about reviewing piles of data and developing complex and measurable tactics.

I'm telling you this because this isn't a marketing post about pretty pictures. This is a post that looks at a recent peer reviewed study about how well-timed promotions can improve the likelihood that a customer will make a repeat purchase.

This study is a huge reminder that you should consider sending campaigns based on your customers' calendar, not yours.

This data reinforces the core logic behind our consideration of recency in our customer ranking philosophy. This keeps your customers engaged in an ongoing shopping process and enhances the impact of your other marketing campaigns.

One of my favorite authors argues that there is a single, easy to track metric for buyer engagement – recency. Though you can develop really complex models for purchase likelihood, just knowing “weeks since last purchase” gets you a long way to understanding how to optimize marketing programs for profit.

Look at the chart above created with data from an online retailer. There is a discount promotion and a free shipping promotion. The coupon promotion outperforms the free shipping promotion as long as the customer has purchased in the past 6 weeks. After this point, free shipping outperforms coupons.

In this style of cycle measurement, customers are moved back to the time = zero segment (left side of chart) as soon as a purchase is made, and time starts all over again for these customers. If they don’t make a purchase, they continue to slide out down the curves to the right.

The point of the chart is, no matter which promotion customers are exposed to, no matter when their previous purchase was made (2 weeks ago or 20 weeks ago), their likelihood to purchase again can be very simply and accurately predicted by knowing one simple data point: weeks since last purchase.

Customers with all kinds of different purchase patterns, demographics, categories of purchase, campaign exposure, and so forth tend to behave in the same way, that is, their likelihood to purchase at any given point in time from this online store is primarily a function of how long it’s been since they last purchased from the store.

What does this mean for you?

Stay regularly engaged with your customers with coupons to keep them near the left side of your chart (keep them shopping regularly).

I can help. Harvest has a regular program of direct mailers that are designed to help you utilize your customer data and stay engaged with your customers.

You have the data, you have great customers, now you just need a partner that you can trust to help you navigate a more sophisticated marketing program for your bike shop.

Give me a call and let me explain how this can work for you.

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Thanks to the authors of the study and Jim Nova for the source data and their thoughtful insights.

About The Author

Ryan Atkinson

Ryan Atkinson

Ryan is a proven marketing professional who entered the cycling industry in 1994.