In recent projects there are two key merchandising attributes I analyze. I'm encouraging you to do the same.
Attribute #1: "Age" of the customer buying the item.
- Let's say you sell widgets. Two customers purchased a widget in the past year. The first customer is brand new. The second customer has been on the file for five years. "Age" of the customer buying the item = (1.00 + 5.00) / 2 = 3.00. The average customer buying the item is "three years old".
Attribute #2: "Modern" channel index (MCI).
- Say you sell four widgets. The first widget is purchased at your call center. The second widget is purchased via your website. The third widget is purchased via email marketing. The fourth widget is purchased via mobile. Assign a value to each channel. Assume call center purchases are "old school" and get a value of 0.00. Assume e-commerce purchases are "average" and get a value of 0.50. Assume e-mail purchases are more "modern" and get a value of 0.75. Assume mobile purchases are very modern and get a value of 1.00.
- The "Modern Channel Index" (MCI) is calculated as follows: (0.00 + 0.50 + 0.75 + 1.00) / 4 = 0.5625.
Why would I do this?
We'll discuss "why" tomorrow!!