September 17, 2018

Life Tables and Dormant Customer Programs

Look at what happens after the customer has been inactive for thirteen months. 
  • Probability of buying in month 14 = 0.8%.
  • It gets worse, a lot worse, from there.
When the incremental monthly rebuy rate dips below 1.0%, I determine that the customer is "dormant".

Any credible marketer has a "Dormant Customer Program", heck, you have one, right?

Right?

I know you have one. You offer 40% off plus free shipping and you call it good. So yes, that's a Dormant Customer Program.

Vendors might call 'em "Reactivation Programs". Whatever. What matters is what you do with the program. Hint - the program should be so much more than slapping a discount or promo in an email marketing campaign.

Figure out what the customer previously purchased, and market adjacent products to the customer. Test different creative treatments and messaging. Do anything but be boring.

Turns out this life table methodology is pretty important, huh?

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