July 26, 2010

Summer Segmentation: Bribe Rate

The "bribe rate" is one of the most important metrics you can track.

The "bribe rate", of course, is the percentage of orders during any period of time that include a discount, a promotion, or at least one sale item. The bribe rate is often inversely correlated with brand loyalty.

If you think this metric needs to be on every single performance dashboard, you are right.

If you think this metric makes for a perfect segmentation variable, you are right!

Segment your customer base into high, average, and low bribe rates. It matters!

2 comments:

  1. Great summer segment! Do you also take into account the number of visitors who were exposed to, but didn't take the bribe? I am just thinking that the bribe rate is dependent on the type and magnitude of the bribe, so would you have to keep the bribe constant over a period of time to get meaningful trends?

    Many thanks,
    Michael

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  2. Yours is a hypothesis that can be tested, so test it!

    It has been my experience that the type and magnitude of the promotion are largely irrelevant --- you simply record in a database when customers respond to a promotion/discount, and then measure their subsequent performance to see if bribing the customer is a bad thing.

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