You probably run Life Tables for your customer file, right?
Right?
They've been around forever (click here for a reference from Wikipedia).
A life table calculates the probability of a first-time buyer (or any buyer cohort) purchasing again.
In e-commerce (and especially in catalog marketing), the table has particular relevance, especially among first-time buyers. Typically, the table takes the shape of the table illustrated here.
See the column where it says "Months After 1st Purchase"?? If a customer purchased for the first time on September 8, then the row with a "0" shows how many of the customers purchased for a second time in the remainder of September.
If the customer did not buy in the remainder of September, then we move down to the row with a "1" ... this represents what happens when the customer is marketed to in October. If the customer does not buy, we move down to the next row, and so on.
Tomorrow we'll talk about the data in the table - and how you use the information.
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