How to work out if a customer has lapsed

How to work out if a customer has lapsed

How to work out if a customer has lapsed

In retail people spend a lot of time discussing and writing about lapsed customers. We think these articles would be a lot more useful if they helped you identify your lapsed customers first.

So how do you work out if you customer has lapsed?

Firstly start with the number of times a customer has purchased. For customers who haven’t purchased you need to look at the average number of days it takes for a customer to purchase a second time from your online store. For Moco Insight clients just click on your ‘Repurchase Rate’ insight. Below is a screen shot of what that insight looks like.

Screen Shot 2014-07-07 at 4.28.31 PM

For this client customers generally purchase a second time within two days (got to be happy with that!). Therefore anyone who has purchased only once after three days or more is considered lapsed. In this case it is 75 customers.

For ease of use we have also created standard reports which breaks customers into number of ‘Purchase Days’ bands.

Purchase days

For customers who have purchased more than once we recommend you look at the average number of days between purchases per customer to help establish if they are lapsed. You if are an advanced Excel user you could export your customers’ details and apply a formula to work this out.

For Moco Insight client just load a purchase days report and then click on the column configuration button (see screen shot).

Column config

 

This will bring up the custom report builder. From here click on the ‘Customer Insights’ column group and then place ‘Days Between Purchases’ into the active window and then apply.

Colum conf 2

Column config 3

This column shows you the average number of days each customers has between purchases. This is an extremely important calculation as you can use each customer’s own behavioural pattern to establish how frequently they purchase from your store and then if they have lapsed.

You can then use the following filter set to drill down and identify which of your customer set has lapsed.

Lapsed filters

The result will be the number of customers lapsed based on their buying behaviour. The filter set given is just an example and can be changed to suit your own business. You can change the numbers and day ranges to suit your own product type. We recommend you save the filter set so you can use them over and over again.

As an online retailer you have now identified your lapsed customers and can start applying these techniques mentioned in the articles to reengage this customer segment.

 

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