October 30, 2019

Rebuy Refresher

There's a clear distinction between Transactional Brands and Relationship Brands. You can see it via annual repurchase rates:
  • Annual Repurchase Rates < 40% align with Transactional Brands.
Look at it this way. Let's say that you retain 28% of last year's buyer file. Let's say that you had 100 buyers last year:
  • 100 * 0.28 = 28 retained buyers.
How many new/reactivated buyers do you need to keep the buyer file level?
  • 100 - (100 * 0.28) = 72 new/reactivated buyers.
You're clearly a Transactional Brand when this happens. You are looking for customers who have a need at a point in time, and you're looking to capture that order RIGHT NOW, aren't you?

Go calculate your annual repurchase rate among twelve-month buyers. What is the rate? Is it under 40%? Yes? It probably is. And that means that, in all likelihood, you are a Transactional Brand. That's not good/bad ... but the reality of the situation dictates the marketing tactics that are likely to work.

There's a reason that the majority of customer loyalty efforts employed by "brands" fail or lose money or do not generate sales gains ... they're applied to Transactional Brands.

Make sense?

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.


Here's what I noticed. On March 11, 2024, we were all sent home for a few months due to COVID. Folks will say the world changed on that ...