Start now with a year-end RFM report. Benchmark first-time buyer percentages and set goals to decrease the percentage of one-time buyers. You should try to achieve a 50-percent rebuy rate of the 12-month first-time buyers. To illustrate the example, refer to the RFM report noting 138,000 one-time buyers in 2004. Setting a 50-percent rebuy rate means 69,000 will be converted to a second purchase. Monitor the progress monthly and incorporate successful programs and strategies throughout the year.
Acquiring customers is one of the most expensive parts of doing business. Focusing the marketing, merchandising and creative effort to convert these first-time buyers contributes to a profitable lifetime value.
Gina Valentino is vice president and general manager of J. Schmid & Assoc., Shawnee Mission, Kan. You can reach her by e-mail at firstname.lastname@example.org.