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?

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