January 23, 2023

Customer Acquisition Index

One of the tables in this version of the MineThatData Elite Program comes from our Category Development project. Here, we sum all sales in the past year from existing buyers, and we sum all sales from new buyers, then we calculate an index (Acquisition Sales / Existing Sales) / (Acquisition Total / Existing Total). This is all performed at a Merchandise Category level, and the table looks something like this:

There are brands that acquire customers across all categories at the same rate. These brands treat their customers as "one customer". This is a common scenario in the omnichannel thesis ... same merchandise in same channels promoted similarly in an allegedly seamless/frictionless manner.

The table above is not symbolic of the omnichannel thesis. This brand is marketing to customers and categories based on what is best for the customer and/or category. Outerwear has an index of 1.570 ... sales of outerwear to new customers are 57% higher than sales of outerwear are to existing customers. New customers prefer outerwear. Meanwhile, existing customers skew to Womens categories.

Either this brand migrates customers from Outerwear to Womens (this fact is verified or proven wrong in a Category Dynamics project), or the brand is essentially setting itself up for challenges because existing customers prefer fundamentally different merchandise than new customers prefer.

Either way, the Customer Acquisition Index (CAI) tells you what is happening.

What is happening with your customer base?

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