In case you document the date of each buyer transaction in your database, you should utilize the facility of Latency to assist enhance your buyer retention.
Latency is solely the typical period of time between buyer transactions. You’ll usually discover the Latency between the first and 2nd buy to be totally different from the 2nd & third buy, the third & 4th buy and so forth.
For instance, in the event you personal a retail enterprise and discover that the typical time between the first and 2nd buy for all of your prospects is three weeks, anybody taking longer than three weeks to make their 2nd buy is deviating from the typical buyer habits.
In case you ship a promotional communication to prospects which have simply crossed over this “2nd buy latency” interval, you’ve got an excellent probability of tipping these prospects into making that every one vital 2nd buy. It is a sensible method of constructing a buyer retention technique.
After all, not everybody will reply to a latency-based promo, however that is merely the character of direct advertising. The sensible factor about utilizing latency is that it helps you ship your message to the correct buyer on the proper time.
Begin Measuring Your Buyer Latencies
So, what’s one of the simplest ways to start out selling to your prospects primarily based on Latency?
To maintain issues easy, start by calculating the typical time between the first & 2nd buy of all of your prospects collectively. The, calculate the Latency between the 2nd & third buy and so forth. Here is an instance of what a latency desk would possibly appear to be.
Transaction & Latencies
1st & 2nd buy 30 days
2nd & third buy 20 days
third & 4th buy 15 days
4th & fifth buy 90 days
fifth & sixth buy 150 days
The very first thing it’s possible you’ll discover is that you’ve got a variety of prospects that buy from you as soon as after which by no means purchase once more. You might also discover out that you simply don’t have a variety of prospects which have bought from you greater than three occasions. That’s good info to know as effectively. You actually cannot design an efficient buyer retention technique if you do not know the latency traits of your prospects.
Wanting on the above desk, we will say that any buyer that passes the typical variety of days for a specific transaction, and doesn’t make a purchase order, is deviating from the typical buyer habits. Sending them a promotion proper after a specific latency interval passes is wise advertising. It’s sending the correct promotion to the correct buyer on the proper time.
One other attention-grabbing factor you’ve got seen from the above latency desk is that the latency decreased for every buy as much as the 4th buy after which it drastically elevated after that. If that is what my buyer buy latency desk regarded like, and assuming I had a variety of prospects that solely bought as soon as, I might have three inquiries to resolve.
1. Why does the latency take a drastic improve after the 4th buy?
2. What can I do to scale back the latency between the 4th and fifth buy?
three. How can I cut back the variety of prospects that simply make a single buy after which by no means come again?
Had I not created a latency desk, I may need by no means even considered the above questions. Now, having information of my latency knowledge, I would create a welcome package deal for brand spanking new prospects with an incentive to make a 2nd buy.
I might additionally have a look at methods I would lower the latency between the 4th and fifth buy. Maybe a bigger incentive communicated at day 25 or 30.
One other benefit to utilizing Latency knowledge in your advertising program is that it’ll inform you one of the best time to speak together with your prospects. Do you ship the identical advertising communication piece to all of your prospects no matter the place they’re within the buy cycle? Utilizing Latency, you solely promote to the shoppers that move their Latency intervals, permitting you to solely spend when you could.
I like to recommend you take a while to watch your buyer buy latencies. It is the neatest and handiest method to cut back your spending whereas growing your income and buyer retention.