November 08, 2022

Most Valuable Customers by Price Designation?

Are the customers who buy items at a discount more likely to spend a lot in the future, or are customers who pay full price most likely to spend a lot in the future? Let's take a look at one example.


The answer? Neither!

In this example, as the customer becomes more loyal, the customer most likely to spend a lot in the future transitions from a customer who spent 76% - 99% on items at/above their historical average price point to a customer who, at 6+ life-to-date purchases, spent 51% - 75% on items at/above their historical average price point.

In other words, you want a customer who spends a mix of money (in this example) on items that are discounted and on items that sell at full price ... skewing toward full price early in the life cycle.

Tomorrow, we'll study which cells yield the most future gross margin dollars.

P.S.:  Look at the future sales numbers of customers acquired via 100% discounts (0% at/above the historical average price point). Just look at those numbers. Now go back to your customer acquisition strategy and ask yourself how much discounting you do, ok?



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