March 17, 2021

The Welcome Model

Here's the outcome of a Welcome Model for a recent project:

  • Most Important Variable = Merchandise Category Purchased From.
  • Second Most Important Variable = Number of Merchandise Categories Purchased From.
  • Third Most Important Variable = Number of Items in a First Order.
  • Other Variables = Channel Purchased From, Price per Item Purchased.
It's all about merchandise, in this case. Repurchase rates varied by 50% (i.e. a 20% rebuy rate could be 10% or could be 30% based on "what" category the customer bought from). That's a big deal! Your website should recognize who visits, and based on who visits, should offer products to first-time buyers that lead to higher rebuy rates ... and consequently ... better Customer Development.

What if the customer wants to buy something that leads to low long-term value? Well, if you can generate profit doing that, go ahead and pocket the profit. But the customer isn't coming back, so strongly push for a second purchase during the Welcome timeframe and then let the customer go.

When you think about Developing Customers instead of Converting Customers, you take a very different approach to growing your business, don't you?

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