Measuring how the products in the first order influence customer repurchases

A Repeat Customer Insights customer was asking about the First Product Analysis and the Repeat Purchase Rate:

I'm trying to understand the first product analysis report a bit better. Is repeat purchase rate indicate the repeat purchase rate of that particular item or is it only correlated to any specific user returning?

That report looks at which products were first ordered by your customer base and then calculates how much they've spent (Total LTV) and how often they are making repeat purchases (Repeat Purchase Rate).

For example, say 10 customers ordered a red shirt in their first order at $10 each. Then 5 of those customers came back and bought something else for $20 (any product).

Then the report would show on the line for that red shirt: 50% Repeat Purchase Rate (5 of 10 made a second purchase) and $200 Total LTV (10 x $10 plus 5 x $20).

It doesn't look at how often a specific product is purchased (e.g. how many red shirts) or if a product is popular with repeat orders.

It's looking at which products have a positive influence on the lifetime behavior of customers. e.g. people love the red shirt VS no-one who buys a purple shirt comes back.

Eric Davis

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Topics: Product analysis

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