July 29, 2020

Even Loyal Customers Quickly Equalize

Look down the column where "Freq = 15", a column that represents customers who purchased 11-15 times in their history.

At recency = 14 the customer has a 44% chance of buying again. This customer, remember, has 11-15 life-to-date orders.

Now look at recency = 01 / Freq = 02:
  • Annual Rebuy Rate = 44%.
These two customers are equal.
  • Frequency = 11-15, Recency = 15 months.
  • Frequency = 2, Recency = 1 month.
Even your loyal buyers quickly equalize themselves, constantly trending in a negative direction unless they purchase again.

This is one of the main reasons why customer acquisition is so darn important. We think we are dealing with a loyal customer base. We simply aren't. We deal with customers who achieve loyal status and then begin to immediately decay. We constantly need new customers, don't we?

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