July 05, 2010

Summer Segmentation: Price Points

We like to analyze customers on the basis of new/existing behavior, or the channel that the customer prefers.

Often, an analysis by price point purchased is important.

I like to pull every single purchase transaction for the past twelve months, and then divide the items into five equal groups.
  • Items of $0.01 to $4.99.
  • Items of $5.00 to $12.99.
  • Items of $13.00 to $19.99.
  • Items of $20.00 to $39.99.
  • Items costing $40.00 or more.
Next, pick the categorization out of the five listed above that the customer buys the most items from.

Finally, analyze conversion rates for customers by prior price preference. Or analyze the performance of various items on your website based on prior price preference. You're going to learn interesting facts about your customers!

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