June 16, 2021

Customer Development: Price vs. Rebuy Rate

As prices increase, annual repurchase rates decrease. For the Merchandise Categories at an actual brand, here's what the relationship looked like.




At a price point of $9.00 a unit, rebuy rates averaged around 20.7%.

At a price point of $10.00 a unit, rebuy rates averaged around19.5%.

The red line represents the fitted relationship (power function for those of you who are interested).

As prices increase, repurchase/rebuy rates decrease.

This is going to be an issue should inflation begin to creep into our business models.



No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Playing The Odds

When I read Scarne on Cards, I was thrilled with the discussion of probability/odds. Studying this data in the 1970s suited me well for what...