June 17, 2013

Items That Fuel Future Purchases

All things being equal, you want to sell items that cause customers to purchase future items related to the original purchase.  Of course, you have to sell the original item, and that's not easy, but from a marketing standpoint, you want to capitalize on items that fuel subsequent loyalty.

In other words, the RV purchase leads to a need for add-ons, those add-ons generate incremental profit.

In Merchandise Forensics, I analyze items that foster subsequent add-on behavior.  These items accelerate customer loyalty.  The marketer advertises these items via landing pages and email campaigns.

How do I do this?
  1. Segment all items sold between May 1, 2012 and April 30, 2013.
  2. Identify all customers who purchased items sold during this timeframe.
  3. Identify all customers who repurchased between May 1, 2013 and May 31, 2013.
  4. Identify customer characteristics of customers buying items from 5/1/2012 - 4/30/2013.
  5. Aggregate dataset down to one row per item.
  6. Create model relating attributes of customers buying items to future repurchase rate of customers buying items.
  7. Index the results.
This gives you a rank-ordering of the items that cause customers to come back and purchase ... and it also identifies the items that squelch future customer purchases.

In your email marketing campaigns, be sure to feature items that cause customers to come back and purchase again.  Simple!

Contact Kevin (kevinh@minethatdata.com) for your own, customized Merchandise Forensics project.

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