Many of the secrets of your business are buried deep in merchandise/marketing reports that simply do not exist. The modern digital world could care less about the products a customer purchases.
You, meanwhile, need to care deeply about what a new buyer purchases, because as it turns out, you are setting your business up for either long-term success or the alternative. Be mindful of what you are doing.
Here are twelve-month rebuy rates for first-time buyers based on the merchandise category the customer bought from in a first order. The categories are dummied-up to protect the innocent.
- Category 01: 36% Rebuy Rate.
- Category 02: 29% Rebuy Rate.
- Category 03: 31% Rebuy Rate.
- Category 04: 27% Rebuy Rate.
- Category 05: 27% Rebuy Rate.
- Category 06: 37% Rebuy Rate.
- Category 07: 32% Rebuy Rate.
- Category 08: 37% Rebuy Rate.
- Category 09: 30% Rebuy Rate.
- Category 10: 33% Rebuy Rate.
- Category 11: 34% Rebuy Rate.
- Category 12: 39% Rebuy Rate.
- Category 13: 35% Rebuy Rate.
- Category 14: 37% Rebuy Rate.
- Category 15: 23% Rebuy Rate.
- Category 16: 28% Rebuy Rate.
- Category 17: 29% Rebuy Rate.
- Category 18: 33% Rebuy Rate.
- Category 19: 40% Rebuy Rate.
- Category 20: 34% Rebuy Rate.
- Category 21: 37% Rebuy Rate.
For this brand, the two most popular categories just turn out to be two categories that attract spectacular customers ... Category 12 and Category 19. In Nordstrom terms, those would be "casual apparel" categories. Look at Category 15 ... that would be like a Home category (towels, bedding etc).
One of the valuable lessons I learned back in the early 1990s at Lands' End was that categories that had narrow appeal were terrible categories to acquire customers in. You wanted the new Womens Casual customer because she'd buy Womens Casual and Womens Tailored and Kids and Mens Casual and Mens Tailored and Home. Her long-term value was better because she was pre-disposed to buy from most of our categories. The Home buyer? Nope. The customer had a narrow interest and consequently, low long-term value.
Nobody listened, of course, but it was such a valuable lesson.
This brings me to you. When you are out there paying tolls on Facebook, are you making sure that you attract customers who love your entire assortment (i.e. high-value prospects) or are you just paying for anybody (i.e. low-value prospects)?
You run this analysis for your business, right?
If you don't run it, what stops you from running it?
Yes, I'm building a case toward something ... if you've made it this far, you're one of the smart ones!