September 13, 2018

Life Tables and Welcome Programs

Look at the first four rows of our life table (values of 0/1/2/3).

These are the first 12-15 weeks after a customer buys for the first time. And as it turns out, these are 12-15 really, really critical weeks.

In total, the customer has a 22.6% chance (in our example) of buying for a second time. Now go all the way to the bottom of the table, at the 30th month. The customer has a 41.1% chance of buying again after 30 months.

This is important. It means that more than half the customers who are going to repurchase (likely ever) do so within three months.

Now if you knew that half-ish of the customers you just acquired were going to buy for a second time in the NEXT THREE MONTHS, wouldn't you do something about it?

And no, this doesn't mean you are "taking care of business" by doing your normal marketing activities.

This is why Welcome Programs are so darn critical. So. Darn. Critical. You have this limited window when you have to convert the customer before the customer just kinda fades away.

Goal and Objective #1 for 2019: Develop a credible Welcome Program that cross-shops the first-time buyer into other merchandise categories and potentially other channels. Increase the three-month repurchase rate by five points.

Scott Galloway / Code Commerce Presentation

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