Months to Loyalty

When you know how likely a customer is to repurchase in any given month, you can also derive a fun metric that I call "Months to Loyalty".

• Months to Loyalty = How Many Months It Takes, On Average, For a First-Time Buyer To Achieve A Fifth Purchase.

Mind you, few customers ever achieve loyalty status, so the metric applies to the vast minority of customers who ever become loyal. The metric informs us of the long process the customer must go through to ever become highly profitable.

I reshaped yesterday's data, so I could calculate Months to Loyalty.

At the bottom of the table you see two metrics.

• Months to 5x = Average # of Months Until the Customer Buys for the 5th Time.
• Months to 10x = Average # of Months Until the Customer Buys for the 10th Time.

In this case, Months to Loyalty is 28.6 ... it takes the average customer who becomes loyal 28.6 months to get there ... about 2.5 years.

28.6 months. In this case, it means you have a lot of work to do for several years to nudge the customer to loyal (5x) status ... realizing of course that very few customers will make it there.

The more months required to generate loyal status (i.e. a fifth order), the more you focus actually needs to be on new customers. When the metric is lower (i.e. 12 months) you can leverage all of those wonderful loyalty tactics you've been craving to implement.