Did You See How 2x - 3x - 4x - 5x Buyers Evolve?

Remember our graph from yesterday?

Once the customer purchases for the second time, the customer is ready to roll!

• 2x Buyer:  Quality to Average.
• 3x Buyer:  Quality to Average.
• 4x Buyer:  Mostly Quality.
• 5x Buyer:  Loyal to Quality.

Here's an important point ... the customer doesn't achieve Loyal status (in this case) until a fifth purchase. Even then, the customer is at Loyal status for one (1) month, that's it ... then the customer quickly slides into Quality territory.

I repeatedly see mistakes with businesses who try to push loyalty initiatives at customers who simply aren't even close to becoming loyal customers. Don't do that. Use Action Streams to nudge the customer along, ok?

How Much Worse are First-Time Buyers?

Much, much worse.

The secret to success in e-commerce is getting a customer to a second order. From there, the customer has significantly better long-term value.

Look at the blue line in the image above. These are first-time buyers ... even at the very moment the customer purchases for the first time, the customer only has a 23% chance of buying in the next year. From there, the customer continually becomes less responsive. This is why having a Welcome Action Stream is so darn important ... your odds of converting a first-time buyer are best at months 0/1/2/3 after a first purchase.

After a second purchase, the customer is reasonably responsive. In the image above, a 24 month 2x buyer is as responsive as a 1 month 1x buyer.

In my projects, I create Action Segments. For twelve-month buyers, here's what the segments look like:

• Elite = 75%+ Chance of Buying Again Next Year.
• Loyal = 60% - 74% Chance of Buying Again Next Year.
• Quality = 40% - 59% Chance of Buying Again Next Year.
• Average = 20% - 39% Chance of Buying Again Next Year.
• Struggling = 0% - 19% Chance of Buying Again Next Year.

It's easy to see that the first-time buyer starts in the Average segment, then quickly fades into the Struggling segment. You immediately need a Welcome Action Stream to prevent the customer from falling into Struggling territory ... at which point the newly acquired customer is already at risk of being lost.

Taking Advantage of the Plus Indicator

The 2x customer is at 7 months of recency, and has the following repurchase metrics.

• 35.2% chance of buying again in the next year.
• 3.0% chance of buying in the next month.
• Average Action Segment.

However, you send the customer an email campaign, and the customer clicks through the campaign. Yeah! Repurchase metrics change.

• 37.2% chance of buying again in the next year.
• 6.0% chance of buying in the next month.
• Average Action Segment.

The "Plus" indicator kicks in. You now have a few weeks to kick off an Action Stream to capitalize on the fact the customer visited your website.

Do you see how different this style of marketing is compared to typical marketing campaigns?

I'm not saying you shouldn't execute your marketing campaigns.

I'm asking you to complement marketing campaigns with Action Streams that capitalize on Plus/Minus customer states.

Taking Advantage of the Minus Indicator

Here's data for customers with two life-to-date purchases. We're measuring the probability of the customer buying in the next year.

The arrow is important ... that's where the customer slumps to a lower Action Segment. At four months of recency, the customer has a 39.2% chance of buying in the next year. The customer just dropped from what I call a "Quality" Action Segment to a "Average" Action Segment.

• 1 Month = 46.1% Rebuy Rate, Quality Action Segment.
• 2 Months = 43.2% Rebuy Rate, Quality Action Segment.
• 3 Months = 41.1% Rebuy Rate, Quality Action Segment.
• 4 Months = 39.2% Rebuy Rate, Average Action Segment.
• 5 Months = 37.9% Rebuy Rate, Average Action Segment.
• 6 Months = 36.6% Rebuy Rate, Average Action Segment.
• 7 Months = 35.2% Rebuy Rate, Average Action Segment.
• 8 Months = 33.8% Rebuy Rate, Average Action Segment.
• 9 Months = 32.6% Rebuy Rate, Average Action Segment.
• 10 Months = 32.0% Rebuy Rate, Average Action Segment.
• 11 Months = 31.1% Rebuy Rate, Average Action Segment.
• 12 Months = 30.4% Rebuy Rate, Average Action Segment.

At three month of recency, the customer is about to drop to a lower Action Segment. This is where the "minus" indicator kicks in, causing you to kick off an Action Stream to try to prevent the customer from falling to a lower-value segment.

Does that make sense?

The Plus/Minus Indicator

One of the most important variables in your customer database is the plus/minus indicator.

• Plus = Customer just did something positive (signed up for rewards, visited your website, viewed your community blog, put something in a shopping cart).
• Minus = Customer is about to fall from a good segment to a not-as-good segment.

The "plus" bump lasts about 30 days, sometimes more, most of the time less. You have a short window to do something with the positive action.

The "minus" indicator happens to all customers as they degrade and ultimately lapse. You want to prevent this continuous slide. When the customer is about to migrate from Loyal status to Quality status, the customer has a lower chance of repurchasing and consequently has lower long-term value (and therefore, requires you to find a new customer to make up the difference).

Action Streams apply to both plus and minus situations. You try to quickly convert a "plus" customer, you try to rescue the "minus" customer.

Does that make sense?

When you hire me for an Action Streams project, the plus/minus variable is probably the most important variable ... you use it to drive the Action Streams.

For Those Of You In The Print World

Not in the print world? You can skip, we'll see you tomorrow.

If you are mailing catalogs, you likely need to immediately evaluate three things.

1. How much money can you save (by sending fewer catalogs) while protecting top-line demand.
2. What the optimal Action Stream looks like from a print standpoint (i.e. how many times to mail a customer, annually).
3. What products align with print vs. the products that align with digital channels.

This was the #1 project request in 2024 (and that counts all the e-commerce brand analysis requests last year) ... some catalog brands got a significant head start and are making progress in 2025 ... transforming their businesses. I've seen the positive results in my Elite Program runs. It's happening ... the future is out there, waiting to be written.

Here's three ways that catalog-centric brands are working with me in 2025.

1. Full Catalog Action Stream and Code To Update Your Database As You Wish. Cost = $30,000.
2. Half Catalog Action Stream and Digital Action Stream Analysis ... you don't get the code, you do get to learn how often you should be mailing customers, you learn products that align with print vs. digital, and you'll get the Action Segments and Plus/Minus variable used in Action Streams. Cost = $22,000.
3. Half Catalog Action Stream Project (Most Popular Last Year) ... you learn how often to mail customers, you learn the products that align with print vs. digital, you get a forecast for where your business is likely to head as a consequence. Cost = $15,000.

My calendar generally fills up fast in April, once clients see that they're going to have problems making their p&l work during the fiscal year. So get ahead of the curve and contact me now (kevinh@minethatdata.com). Full product offering can be observed here. This is looking like one of those years where you're dealing with a bit of uncertainty. 

Booklet Update

I promised you there was a companion booklet forthcoming on the topic of Action Streams. I've got a few things going on require attention for about a week. After that I'll work on getting the text published. Thanks for your patience, it's coming, ok?