Reactivation Customers Buying Discounted Items

In most projects, I categorize items as selling at/above their historical average price point, or selling below their historical average price point. In other words, you have an item that sells for $50.00. Sometimes it is 10% off ($45), sometimes it is 40% off ($30.00). Average it all together, and the historical average price point for the item is $43.77. When it sells for $45.00 or $50.00, it is selling at/above the historical average price point for the item. When it is selling for $43.77, it is selling below the historical average price point for the item.

• $50 = Above
• $45 = Above
• $43.77 = Historical Average Price Point
• $30 = Below

We can evaluate reactivation candidates based on the fraction of items they purchase that sell below their historical average price point.

This is our 18 month 1x buyer segment. The number of items the customer purchased in a first order matters a lot. The share of demand from items selling below their historical average price point matters some. Look down the one item column.

• No Items Below Historical Average Price Point = 4.27% Annual Rebuy Rate.
• Item Is Below Historical Average Price Point = 3.36% Annual Rebuy Rate.

In other words, the customer that purchased an item at/above the historical average price point has a better chance of purchasing in the next year than the customer buying the item below the historical average price point.

Do you see what is happening here?

We are slowly stacking attributes on top of each other ... by doing so, we create a list of reactivation candidates who are actually more likely to, you know, reactivate!