September 16, 2019

Who Is Most Valuable?

Remember our three tables ... for low price point band customers ...

... for average price point band customers ...

... and high price point band customers ...

Let's look at next year's total expectation by customer type.
  • Last Year's Low Price Point Band Customers = $52.01 next year.
  • Last Year's Average Price Point Band Customers = $45.71 next year.
  • Last Year's High Price Point Band Customers = $33.91 next year.
Oh oh.

Remember, this company was consciously moving the merchandise assortment toward high price points. Unfortunately, the customer who buys from the high price point bands spends less in the future.

These are analytical tools that you use before your merchandising team wants to make changes, or before your CEO wants to make changes. You get an idea if the strategy will work before you ever implement the strategy. That's the power of this stuff, right?

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