May 18, 2014

Segments That Do Not Convert

Look at the bottom-middle segment. This one has interesting historical attributes, don't you think?
  • 3.3 purchases last year (which is pretty good, actually).
  • Mix of website and retail purchases is reasonably close to 50/50 (#omnichannel!).
  • 37.3 website visits last year.
In other words, this customer visits the website 11 times for every 1 purchase, with nearly half of the purchases happening in-store.

In the future, this customer is not likely to buy - but very likely to visit.

This is the kind of traffic you probably don't want to pay for. The customer is visiting all the time, but is not buying anything (in the next month, this customer visits 4.8 times, but purchased 0.47 times ... maintaining a 10-to-1 or 11-to-1 visit to purchase ratio).

We'll be tolerant of a customer who visits 100 times a year and buys 13 times a year ... this is an amazing customer, we'll take her garbage out to the curb on Friday morning if necessary.

Analytically, however, we want to pay close attention to customer segments that visit often but buy infrequently. When an existing customer, after adding retail purchases into the mix, buys infrequently and has an 11-to-1 visit-to-purchase ratio, we need to look much deeper into the motives expressed by this customer segment. Is the customer looking for discounts? Promotions? Clearance merchandise? Please research what this customer purchases when she finally does buy something. Look carefully at the pages and merchandise viewed online, or via mobile.