Predicting customer orders using Customer Purchase Latency in Shopify

A Repeat Customer Insights customer emailed me a question about the Customer Purchase Latency report and how they could use the previous customer behavior to make a prediction about repurchases.

[I would like to know] are my customers most likely to purchase within 30 days from the last order,

Let's use the data below as an example (if you have Repeat Customer Insights installed, feel free to follow along by looking at your own numbers)

example customer purchase latency

The majority of your customers will purchase once or twice so you'll want to look at the top of the report with the 1st and 2nd order rows. Latency is the delay between behaviors so you'll look at the transition between the 1st and 2nd order.

In this case the latency is 63 days on the second order (red box). That means, for the customers who placed a second order (behavior) it was on average 63 days after their previous order (order #1).

Looking at the repeat purchase rate, you can see that 69% of the customers who placed the first order went on to place a second order. (Due to how the math works, this also means 69% of the entire customer base placed a second order).

So to answer the question directly:

No the majority of the customers are taking about 2 months to place a repeat order. Even the very best repeat customers who have purchased 10 times are taking longer than 30 days to order.

If you haven't installed Repeat Customer Insights yet, it's a simple process to get a similar look at your customer behavior.

I just added a way to export the analyzed customers to a file so you can even import it into other systems (e.g. Facebook for a custom audience, Excel for some deeper segmentation)

Eric Davis

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Topics: Customer analysis Customer purchase latency Forecasting Repeat customers

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