🎓 Definition
An Active Customer is a Loyal Customer who shops within a certain period of time, defined by the Retailer, with a defined recency time frame.
A Customer who shops above a defined threshold of this pattern will be considered as Inactive.
🧪 Example of Active Customers
For example, if the recency level is defined as at least one shopping within the past 6 weeks, every Customer that corresponds to that pattern is considered Active.
❓Why Active Customers are important to Retailers
- Active customers tend to purchase more frequently and spend more than inactive customers. By identifying these customers, Retailers can target them with personalized Targeted offers and promotions to encourage them to make more purchases, thereby increasing revenue.
- Active customers are more likely to be loyal to Retailers, which can lead to repeat business and positive word-of-mouth referrals. By identifying and rewarding these customers, Retailers can foster a sense of loyalty and keep them coming back.
- By understanding the purchasing patterns of Active Customers, Retailers can better manage their inventory and ensure that they have the right products in stock to meet demand.
- Based on Active Customers data analysis, Retailers can fine-tune their strategies on Product Range, pricing strategies, and marketing Campaigns.
- Identifying and retaining Active Customers gives Retailers an advantage over their competitors, as they can strengthen loyalty and ensure their customers are less likely to shop elsewhere.
- It is critical to keep and engage with Active Customers bearing in mind, that the cost to acquire New Customer is more higher than the cost to invest in keeping existing Active Customer.
How do retailers typically define the threshold for an "Inactive Customer"? Is it solely based on the absence of purchases within the defined recency time frame, or are there other factors involved?
Retailers generally define an "Inactive Customer" based on the absence of purchases within the specified recency time frame. However, the exact threshold can vary among retailers and may also take into account other factors such as frequency of past purchases, total amount spent, or engagement with marketing communications. Some retailers might use a combination of these factors to determine whether a customer is considered inactive.
What specific strategies or methods can retailers use to effectively identify and target their Active Customers with personalized offers and promotions?
Retailers can employ various strategies and methods to identify and target their Active Customers. One common approach is to utilize customer data analytics to analyze purchasing patterns, frequency, and spending habits. This data-driven approach helps retailers segment their customer base and create personalized offers and promotions tailored to the preferences and behavior of Active Customers. Additionally, retailers can use loyalty programs, email marketing campaigns, and targeted advertising to engage with Active Customers and incentivize them to make more purchases.
Are there any industry benchmarks or statistics available that quantify the increased spending or frequency of purchases by Active Customers compared to Inactive Customers?
Yes, there are industry benchmarks and statistics available that highlight the increased spending and frequency of purchases by Active Customers compared to Inactive Customers. Generally, Active Customers tend to spend more and make purchases more frequently than Inactive Customers. Some studies have shown that retaining an existing customer can be significantly more cost-effective than acquiring a new one, with Active Customers often contributing a larger share of a retailer's revenue. However, the specific benchmarks and statistics can vary depending on the industry, region, and individual retailer's business model.
🖥️ Make it happen in Ulys Customer Intelligence
How to access Active Customer in Ulys: 2 Simple Steps
Step 1: Select the Buying Pattern under the Behaviors Menu in the Menu Bar.
Step 2: Select the Option in the Filter Menu and select the frequency and period you want to measure.
And here it is. The number of active customers will appear in the Active Customer widget.
You can also extract the List of Customers who are identified as Active Customers from the Table icon.
