Acquiring a sale today does not ensure retention creating lifetime value
By Chris H. Petersen
Retail has a legacy of focusing on immediate results. Historically, the cash register drove the retailers' core metrics. The results that counted were the POS tickets and total sales at the end of the day. The better retailers measured store traffic and calculated the conversion rates. Even with the launch of ecommerce, core metrics still focused on traffic, acquiring customers, conversion and AOV (average order volume). However, studies repeatedly show that the second time buyers are more valuable and more profitable. Why do so many retailers focus so heavily on the first purchase and fail to measure the KPIs of "the second sale"?
Why this is important: What gets measured can be managed and improved. Many retailers are failing to measure the second sale, and track the related customer variables to build lasting relationships that create lifetime value.
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