October 17, 2021

But They Don't Want Cheap Items

Last week I expressed my contempt for a customer base that wanted discounts / promotions. It's not the way I want to run a business (take a $50 item and sell it for $50 and then cheat all those that bought it for $50 and sell it for $35).

But it works, of course.

As a marketer, you want to make sure you understand the difference between customers wanting a $40 item for $25 and customers wanting $25 items. There is a difference.

For the brand I'm analyzing, the top three deciles (which represent customers who, after being acquired, have an average rebuy rate in the next year of 54%) generate 11% of their volume from items selling for between $20.00 and $29.99. Meanwhile, the bottom three deciles (which represent customers who, after being acquired, have an average rebuy rate in the next year of just 31%) generate 38% of their volume from items selling for between $20.00 and $29.99.

What does this mean?

It means the new buyers don't want cheap items. They want quality items sold at cheap prices.

It's the old JCP issue from a decade ago ... customers didn't want everyday low prices of $30 ... customers wanted 40% off of a $50 item.

This impacts "how" you sell stuff on your website, if your brand has customers with similar characteristics.

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