It shouldn't surprise anybody that an S-Tier new customer is one who pays full price. It shouldn't surprise anybody that some marketers view full priced activity to be abhorrent to their "engagement ethos". Consequently, marketers pull in a ton of F-Tier customers. Woo hoo!
For the company we're studying (actual customer data, folks) I use a metric called "above/below" ... if a customer paid $49.99 for a $49.99 item, the customer bought an item that sells at/above the historical average price point. If that item is sold via a 40% off promotion for $29.99, the customer buying the item paid "below" the historical average price point for the item.
Ready to view our tiers?
- S-Tier: 28% of a first order is items selling below their historical average price point.
- A-Tier: 27% of a first order is items selling below their historical average price point.
- B-Tier: 25% of a first order is items selling below their historical average price point.
- C-Tier: 28% of a first order is items selling below their historical average price point.
- D-Tier: 36% of a first order is items selling below their historical average price point.
- F-Tier: 42% of a first order is items selling below their historical average price point.
Nice comparison between S/A/B/C tier new customers and F-Tier new customers, don't you think?
Now, if you build your entire business model around having the lowest prices in the world, have at it.
If you are a brand that used to sell at full price and then went to 20% off and then a few years later went to 40% off and then a few years later went to 60% off (plus free shipping, conditions apply, limited time only because we'll be 70% off next week) ... this message is for you. You might need to start taking some risks over time if you want your business to be successful a few years from now.
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