It’s easy to get caught up in the thrill of acquiring new customers. At Digital Dawn Agency, we understand that very well. However, there’s a key metric that’s just as important as new customer acquisition, if not more so. That metric is time between purchases.
In this article, we’ll discuss why time between purchases is an essential metric to consider when developing a marketing strategy.
What is time between purchases?
Time between purchases, or TBP for short, is the amount of time that passes between a customer’s first purchase and their second purchase. It’s an important metric because it tells you how frequently your customers are returning to your store or website to make a purchase.
Why is time between purchases important?
Time between purchases is an essential metric because it’s an indication of customer loyalty. If a customer is returning to your store or website within a short period, it means they’re satisfied with their previous purchase and trust your brand. The longer the time between purchases, the less loyal the customer may be.
Time between purchase and customer lifetime value
Additionally, time between purchases is an excellent predictor of customer lifetime value (CLV). CLV is the amount of money a customer is expected to spend on your products or services over the course of their lifetime. The shorter the TBP, the higher the CLV is likely to be. This is because customers who return to your store frequently are more likely to make repeat purchases and spend more money over time.
Time between purchase and customer segments
Understanding time between purchases can also help you identify the customer segments that are most valuable to your business. For example, if you have customers who are returning to your store frequently and making repeat purchases, they are likely your most loyal and valuable customers. You can use this information to target your marketing efforts towards these high-value customer segments, which can help increase your overall revenue and profitability.
How to measure time between purchases
Measuring TBP is relatively simple. All you need to do is identify a customer’s first purchase and then track when they make their second purchase. This can be done manually, or through an automated system that tracks customer behavior.
One easy way to track TBP is through your email marketing campaigns. You can use email marketing software to automate emails that remind customers to make another purchase after a certain period. For example, you can send an email to customers who haven’t made a purchase in 30 days, reminding them of your products and services.
Another way to measure TBP is through customer surveys. You can ask customers how frequently they make purchases from your store or website, and how satisfied they are with their previous purchases. This can help you understand why some customers may be returning more frequently than others, and what you can do to increase customer loyalty.
Why customers take longer to make repeat purchases
There are several reasons why customers may take longer to make repeat purchases. One common reason is that they may not need to purchase the same product or service again for a while. For example, if a customer purchases a piece of furniture, they may not need to purchase another one for several years.
Another reason why customers may take longer to make repeat purchases is that they may have had a negative experience with your brand. This could be due to poor customer service, a defective product, or a lack of product quality. If this is the case, it’s important to address the issue and improve your customer experience to encourage repeat purchases.
Finally, some customers may take longer to make repeat purchases simply because they are busy or forgetful. In this case, sending regular reminders and incentives can help encourage them to return to your store or website and make another purchase.
How to improve time between purchases and increase repeat consumer rate
There are several strategies you can use to increase TBP and encourage more frequent repeat purchases. Here are a few to consider:
- Offer incentives: Offering discounts or free gifts to customers who make repeat purchases can help encourage them back to your store or website. This can be especially effective if the incentives are tied to a specific time frame, such as a discount code that expires in 30 days.
- Provide excellent customer service: Providing excellent customer service can help build trust and loyalty with your customers. This can encourage them to return to your store or website and make additional purchases.
- Personalize your marketing: Personalizing your marketing efforts can help you connect with customers on a deeper level. By understanding their interests and preferences, you can tailor your marketing messages to encourage more frequent purchases.
- Focus on retention marketing: Retention marketing is all about keeping your existing customers engaged and happy. By focusing on retention marketing, you can encourage more frequent repeat purchases and increase customer lifetime value.
- Offer subscription services: Subscription services can help encourage more frequent repeat purchases by automatically delivering products or services to customers on a regular basis. This can be especially effective for products that customers need to purchase on a regular basis, such as beauty products or pet supplies.
Time between purchases: Closing thoughts
The time between purchases is an essential metric to consider when developing a marketing strategy. It can provide valuable insights into customer loyalty, customer lifetime value, and customer behavior. By measuring and understanding TBP, you can identify high-value customer segments, improve customer retention, and increase your overall revenue and profitability. So don’t forget to track your TBP and use the insights to optimize your marketing strategy for maximum impact.