June 20, 2021

Customer Development: Price vs. Annual Orders per Buyer

Last time we talked, I shared with you a fitted relationship between price and rebuy rates:

I can generate a comparable relationship between price changes and annual orders per buyer. Do increased prices cause customers to purchase fewer times per year?

The answer is "yes".

For the brand we're studying, we have learned that higher prices lead to lower annual repurchase rates (inferring that you'd also see fewer new customers), and we have learned that higher prices lead to fewer orders per year.

This doesn't mean that higher prices are "bad". It means that higher prices changes how Customers Develop.

Next up? We'll look at items per order.

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