Next time you have a few moments to spare, give this exercise a try.
Step 1 = Look at 2005 buyers ... segment them into two groups, one with above-median spend, one with below-median spend.
Step 2 = For each segment, measure the repurchase rate and spend per repurchaser during 2006.
Step 3 = For each segment, measure how many of the repurchasers migrate to above-median spend, and how many migrate to below-median spend, during 2006.
We focus a lot of energy on "loyal" buyers. Take a look at the repurchase rates and migration statistics of above-median and below-median spending customers. You might be surprised to learn just how valuable below-median spending customers are!
Step 1 = Look at 2005 buyers ... segment them into two groups, one with above-median spend, one with below-median spend.
Step 2 = For each segment, measure the repurchase rate and spend per repurchaser during 2006.
Step 3 = For each segment, measure how many of the repurchasers migrate to above-median spend, and how many migrate to below-median spend, during 2006.
We focus a lot of energy on "loyal" buyers. Take a look at the repurchase rates and migration statistics of above-median and below-median spending customers. You might be surprised to learn just how valuable below-median spending customers are!