May 18, 2011

Age and Productivity

You probably have age data appended to your database, correct?

If you have this data appended to your database, then take a look at annual customer spend by age.

This graph depicts a common relationship.  Customers age 40-49 are the most productive customers.

Catalog brands loved this fact back in 1995, when the average catalog customer was somewhere between 40 and 49 years old.

Today, the average catalog customer is somewhere between 50 and 59 years old, often older.  These customers are 10% less productive than are customers with age between 40 and 49 years old.

For many catalogers, the customer is aging 0.5 to 1.0 years for every year that passes, meaning that in five years, the average customer is going to be 55 to 64 years old, and in ten years, the average customer will be 60 to 69 years old.

Take a look at your merchandise productivity over time ... if productivity is dropping by 2-4% per year, and your customer is in her fifties or sixties, well, you've quite possibly identified the reason why productivity is on the decline.

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