January 20, 2013

Kaley's Knits: Demand Up, Newbies Down. How?

If a business is growing the top line, regardless of profit, then growth can only come from a select set of tactics.
  1. Increase New Customers.
  2. Increase Annual Repurchase Rate.
  3. Increase Orders per Buyer per Year.
  4. Increase Items per Order.
  5. Increase Price per Item Purchased.
We already demonstrated that there is a dramatic decline in new customers.  Let's look at orders per buyer per year.

Hey, we have good news, huh?  Around the time when new customer counts plummeted, orders per buyer per year increased.

Without having knowledge of the marketing strategies employed at Kaley's Knits, I can tell that Management made a shift from spending money on customer acquisition to spending money on customer retention.  The metrics (new customers, orders per buyer per year) move in opposite directions at about the same time (mid-2012).

By the way, it's really tough to get customers to purchase more times per year.  You accomplish this by ...
  1. Having outstanding merchandise.
  2. Marketing to the customer more.
  3. Offering discounts and promotions, like free shipping or 20% off.
In a few days, we'll look at items per order and price per item purchased, as we continue our forensic study of Kaley's Knits.

The Math Behind Bifurcated Customers Who Have "Moved On" From Catalogs

Yesterday we talked about a classic, outstanding catalog customer ... and how that customer needed MORE mailings on an annual basis. ...