Second Purchase Inflection Points

Remember our graph for first-time buyers?

Does the relationship look similar for customers after a second purchase? You tell me.

Across the board, response is higher. But the relationship is very similar. The "anniversary bump" is now at months 10/11/12 instead of just at month 12, but the relationship is very similar.

I could keep showing you these images for 3rd/4th/5th purchases. No need. This is the relationship. Your mileage will vary, but not by a lot. I just ran the relationship for customers purchasing for a ninth time - same deal.

Again - I ask you, given how you market to customers today, you likely don't act upon this information (catalogers could via print). But if you could start over, knowing what you know here, how would you change what you are doing to account for the inflection points identified above?

First Purchase Inflection Points

You have a new customer - celebrate!

Now you need to do something. Yes, you! Do something.

Most first-time buyers have tiny windows of responsiveness. I realize this goes against just about everything you've ever been taught, but it is true. Here's one example ... from a successful brand. Look at incremental rebuy rates (i.e. the likelihood of purchasing in month "x" given that the customer has not previously purchased again). Tell me where the two inflection points are.

Go look at your own data - it's gonna look very similar to this.

The new customer is very responsive for a few months - with an inflection point between 2-3 months after a first purchase. Now the customer is less responsive. Notice the inflection point at Month = 12. When a customer approaches his/her "anniversary" of a first purchase, the customer becomes temporarily responsive. That's an inflection point!

I know how you market to customers today. You largely ignore this fact.

Now that you know this fact, how would you change how you market to new customers? Be specific with your recommendations. 

Inflection Points and Seasonality

There's a place along the California coast where Elephant Sea Lions gather to breed, raise children, bark at each other, establish dominance, and generally lay around.

They follow the same pattern, every year.

Many of your customers follow the same pattern, every year. I analyze the patterns all the time. So many of you have customers marooned on Christmas purchases ... they buy every year between November 20 and December 20. That's it. This means there are two key inflection points worth thinking about ... marketing to this specific customer beginning October 1 each year, and then having your Analytics team identify customers in this segment who purchase in Jan / Feb / Mar / Apr / May / Jun / Jul / Aug / Sep / Oct  because those customers experience a true inflection point (new seasonal purchase), and will behave differently as a consequence.

Something Different - Inflection Points

There are many ways to be different, ways that lead to Inflection Points.

Yeah, an office building.

Years ago, I had a client that printed a message on a card in outgoing packages, telling the customer that the brand put a "ghost" in the package. Fun, who wouldn't want a whimsical ghost in their home? But you can test it, and you can see if customer loyalty increases when a whimsical ghost message is placed in an outgoing package. If it does, you've just found a creative inflection point.

Customers generate their own inflection points (a 2nd purchase, becoming a loyalty member, buying from a key category).

Marketers influence inflection points by doing something different.

Impossible Inflection Points

Last week I ate at multiple one-star MICHELIN restaurants. That's what makes vacations fun!

Now, a one-star MICHELIN restaurant can offer an impeccable dining experience at $270 per person, or, the restaurant can offer an impeccable dining experience for just $32.

Either way, the restaurant did a bunch of things right in the past, earned a MICHELIN star, and has now created a situation nearly impossible to manage. Customer expectations are sky high. It will be easy to disappoint the customer, it will be hard to delight the customer. You just do your best to maintain a very high standard.

This is where I start receiving emails from intrepid readers, with quotes like this:

• "Kevin, you don't understand. We are unique and special, but we sell widgets. Widgets are commodity items sold at the lowest possible cost. What inflection point matters for us? We aren't a MICHELIN star restaurant, we're a purveyor of widgets?"

Of course, there are inflection points for the purveyor of widgets.

But there is nothing special about your business. You've designed a boring business. As a result, your struggle is different.

• The one-star MICHELIN business deals with nearly impossible inflection points.
• Your business deals with very boring inflection points.

The one-star MICHELIN business must be creative, must change, must be excellent.

The purveyor of widgets? The rules are very different. Make sure the customer needs widgets a few times per year, make sure your prices are fair, make sure you get the customer a widget immediately. Maybe you hire a "Widget Influencer" to create programming on your YouTube channel, and you link her fabulous shows to increased sales as an inflection point. But make no mistake - you are in a different business.

Negative Inflection Points

You need to get gas ... tank is low and time is short. So you pull up to the pump, and are greeted with this little gem.

In your customer data, you'll notice that one customer out of a thousand process the QR code and sign up for either Silver, Gold, or Platinum level rewards. That's an inflection point.

Your analytics team measures the positive side of the inflection point.

Your analytics team cannot measure the negative side of the inflection point.

• I get $0.75 off each gallon of gas at my QT store by pairing my grocery id to my gas purchase.
• I get $0.10 off each gallon of gas at Shell by accepting PLATINUM STATUS.

Where do you think I'm going to get gas next time?

Each of us manage a business loaded with negative inflection points. I once had a Marketing Executive tell her CEO not to trust me because my website looked like it was created during the Bush Administration. That's a negative inflection point. It's our job to minimize negative inflection points.

Inflection Point: The Camp Fire

Inflection points happen in different ways at different times.

For instance, if you own an RV, you visit a lot of campgrounds. There are two first-impressions you get at a campground. At check-in, you'd probably prefer to walk into a modern office than a double-wide trailer from 1994.

The second first-impression happens when you arrive at your campsite.

Almost every campsite offers a picnic table. That goes with the territory. Some campsites are paved (this one isn't).

But look at the little campfire opportunity.

If you run a 300 site RV campground, it will cost you $79 * 300 = $23,700 to furnish all sites with a campfire pit.

And yes, most of your customers are passing through, they aren't returning.

They are talking, however. Going the extra mile means that an RV customer will recommend this place ... your future new customers come because you offered this little nicety to a current customer. You spend $23,700 in 2021 to obtain new customers in 2024 ... and you cannot connect the 2024 customer to the 2021 purchase of camp fire pits.

So yes, this is an inflection point. Not one you see in your data, but an important one nonetheless. The best performing clients I work with cannot track 20% to 50% (often more) of their new customers. They have word of mouth. Word of mouth is often generated via product/creative inflection points.