Every year just before the holiday season we take a look at the customer database for the Lab Store – the online retail biz my wife runs – and see what’s up with 10x or more buyers.
I often prefer to look at “worst case” data when doing customer analysis; this way you don’t over-estimate the Potential Value of the business going forward. The beginning of the 4th Quarter is a good time to do this since “holiday” really hasn’t kicked in yet, so you don’t have those buying influences skewing the natural activity in the customer database.
At the end of September, we took a look at all customers, no matter when they became customers, who have purchased from us at least 10 times – a best customer analysis. Considering a “year” to be 9/30 to 9/29, we bucketed them by when their last purchase was – past year, 2 years ago, 3 years ago, 4 or more years ago (the business started 5 years ago).
Here are the results:
Last purchase date was in Percentage of all 10x or more Buyers
9/30/07 – 9/29/08 75%
9/30/06 – 9/29/07 12%
9/30/05 – 9/29/06 8%
9/30/04 – 9/29/05 5%
If this data is still confusing, the second line above would read, “Of all customers who have ever bought 10x or more, 12% last purchased in the period 9/30/06 – 9/29/07.