Sometimes you run across a glib marketer who thinks that the reason the customer purchases something is because of price. You'll also run across a lot of voices ... those who want you to do what they tell you to do so they get paid, those who want eyeballs and engagement, those who want to do the right thing. Then you have Lemonheads who just want help.
A good place to start (getting help) is to score every new customer to see what they're going to contribute to your business over time. Learn if you're causing problems.
I'll run new customer scoring models on three different customers.
- Full Price: 12mo Rebuy Rate = 25%. Spend/Repurchaser = $160. Value = $40.00.
- 20% Off: 12mo Rebuy Rate = 27%. Spend/Repurchaser = $130. Value = $35.10.
- 50% Off: 12mo Rebuy Rate = 30%. Spend/Repurchaser = $105. Value = $31.50.
Which customer would you rather have?
Which customer is unlikely to purchase at full price, creating a self-fulfilling prophesy?
Score every single new customer you acquire. Compare the future value of recent acquisitions to the customers you used to acquire. Are you doing anything negative that causes the future value of your business to suffer?
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