October 27, 2014

How Do I Know I Have A Lapsed Buyer / Reactivation Problem?

Here's one of two queries I like to run to identify customer reactivation / lapsed buyer problems.

Step 1 = Identify all customers who purchased in September 2014.

Step 2 = For all customers who purchased in September 2014, count the number who are not first-time buyers, and who had not purchased in the twelve months from September 2013 - August 2014. This is the number of customers who are "reactivated".

Step 3 = Re-run this query, shifting all dates back exactly one month. Count the number of reactivated buyers.

Step 4 = After running this query, going back in time several years, calculate the difference in the number of reactivated customers, year-over-year. For instance, if there were 900 reactivated customers in September 2014, and there were 1,000 reactivated customers in September 2013, then you have (900 / 1,000) - 1 = -10% change in reactivated buyers.

The image above is what I see, repeated over and over again for catalogers, and for retailers. In the past two years, the sky is falling. In retail, the more we encourage customers to sit at home and use devices, the more we're going to see this outcome. In cataloging, the more we ignore customers under the age of 50 by offering merchandise that appeals to customers over the age of 50, the more we're going to see this problem.

First, run the queries and quantify if you have a problem. Or contact me (kevinh@minethatdata.com ... pricing details are found by clicking here) and I'll run this for you. This query yields results, folks, helping explain why lapsed buyers and new buyers are the Story of Fall 2014.

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