December 12, 2022

Loyal Buyers Are Different

There are a lot of things you have to be careful about when evaluating loyal buyers vs. new buyers. Price and merchandise category data help shape your thought process.

Let's look at a handful of metrics, comparing first-time buyers vs. loyal buyers.

AOV, Items, Price.
  • Loyal Buyers = $123, 4.3 items, $28.92 price per item.
  • New Buyers = $106, 2.5 items, $42.67 price per item.

Already our brains should start clicking. Why would new customers purchase a small number of expensive items while loyal buyers purchase many inexpensive items? By the way, this trends happens frequently in the data I analyze.

% of Sales Spent on Items Selling Below Their Historical Average.
  • Loyal Buyers = 30%.
  • New Buyers = 25%.

Looks to me like this brand prefers to offer discounts/promotions/incentives for loyal buyers, doesn't it?

% of Sales Spent on New Items (new in the past year).
  • Loyal Buyers = 20%.
  • New Buyers = 13%.

This is also common. Sometimes traditional catalog brands feature long-term best-selling items to new customers. Sometimes Google has a lot of history with long-term best-selling items, steering traffic accordingly.

% of Sales From Category 6.
  • Loyal Buyers = 17%.
  • New Buyers = 7%.

You will find 2-3 categories that clearly skew to new buyers, and you will find 2-3 categories preferred by your loyal customer base. Be careful here!!!! Don't make the mistake of assuming that because one segment of customers likes a subset of your assortment that all customers will like your assortment ... that's just not how this stuff works in reality.

% of Sales Submitted via Call Center.
  • Loyal Buyers = 31%.
  • New Buyers = 14%.

This is a classic (and dangerous) situation. This is the signature of a classic catalog brand that is battling the past while trying to move into the future. When loyal buyers do "old school things", it's hard to move into the future. When your new customers do "modern things", your instinct as a brand will be to shove "old school things" at customers who want to do "modern things". You'll see this in modern e-commerce as well ... compare mobile vs. desktop.

Your loyal buyers are different. Analyze the differences, and then personalize "how" you treat loyal buyers. You can have one merchandise assortment, but you can also "feature" the stuff that loyal buyers like (and do the same thing for your prospects).

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