January 22, 2009

Comparable Segment Performance

One of the pieces missing from our multichannel analytics and web analytics toolkit is the Comparable Segment Analysis.

Here's a common way to run the analysis.
  • Create a segment of customers with similar performance --- maybe all customers who purchased three or more times in the past twelve months.
  • Isolate these customers --- 3x buyers from 12/1/2007 to 11/30/2008.
  • Measure performance in the next thirty days --- repurchase rates and spend rates during the month of December, for all customers in this segment during the past twelve months.
  • Repeat the analysis by moving all dates back twelve months. Then repeat again, and again, and again, going back as far as you have data to replicate the analysis.
This analysis allows you to see how a core group of good customers are performing --- similar to the retail same store sales metric, but applicable to your typical direct-to-consumer or e-commerce channel.

This analysis is important, because it helps you understand just how much your loyal customers are spending, compared with prior years. You'll know how much the "economy" is hurting your business, independent of your reactivation and customer acquisition strategies, independent of channel shift.

Most important, you'll truly know when your business is starting to recover.