Jim answers questions from fellow Drillers

(More questions with answers here , Work Overview here , Index of concepts here )

Topic Overview

Hi again folks, Jim Novo here.

Today, we’re asked for a simple definition of retention. Problem is, the data / biz model really creates the definition. Meaning, you gotta match the creation of metrics with the actual actions. So I call for segmentation first so we can put some “actionable” stuff in the mix.

Make sense? Let’s do the “simple” (easy? maybe not) Drillin’ …

Q: For an online retailer, what is the best way to gauge retention in its most basic and simplest form? % of orders that are from repeat buyers? % of orders in month 2 who are repeaters that first bought in month 1?

A: I would take direction on this from the actual results of campaigns. Basically, at the point a customer no longer responds, they have defected. Perhaps this averages 3 months or 6 months after 1st purchase, and there will be category or price segments within these “time” segments.…