November 21, 2022

This Happens A Lot!

I see this one a lot ... look at the New/Reactivated row, and compare the price these customers pay for merchandise compared to the best customers.

Among the best selling items (the 5% column), best customers paid an average of $62.43 per item, whereas new/reactivated customers spent $71.96. This difference isn't as extreme through the remainder of columns, but the difference exists.

This happens A LOT in my project work. Either best customers are being given deals/discounts (whereas new/reactivated buyers are frequently given free shipping), or the merchandise preference is slightly different. Given that I'm controlling for the sales potential of the items in this table, it's a discounting issue. 

Sometimes my clients wonder why it is so hard to acquire customers? Sometimes it's hard because you're asking new/reactivated buyers to pay 10% more per item than your loyal customer base is asked to pay. 


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