Most digital analyses provide minimal or no insight into File Power. You see, File Power is not useful from an advertising standpoint, so why would anybody study File Power??
You are different.
You care about the health of your business. Your salary depends upon the health of your business. If your brand is not healthy, you need to accurately forecast inventory levels so that you don't have a bloated inventory situation that harms gross margins (and by default, harms File Power, which further harms the future of your brand).
Look at our table.
Yesterday, we described the fact that the customer file is in an ever-decaying state. We can mitigate this issue two different ways.
- More new customers.
- Higher quality customers.
Once the customer purchases for a second time, momentum begins to take over.
- First-Time Buyer (Recency = 1 Month) ... 34.9% chance of buying again in the next year.
- Second-Time Buyer (Recency = 1 Month) ... 47.4% chance of buying again in the next year.
- Third-Time Buyer (Recency = 1 Month) ... 55.4% chance of buying again in the next year.
You can build momentum ... but you have to act immediately when a customer purchases for a first time. You can't let the customer lapse so far that you lose momentum. File Power is all about building momentum.
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