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In an AMZ environment that becoming more competitive (CPCs increasing, records amounts of capital raised by aggregators), Sellers need to find new angles to compete.
One way to do this for brands who think they have a decent amount of repeat purchasers (supplements, pet product, any type of consumable really), is to focus on your own customers to inform some more strategic decisions about how you acquire new customers and what products to sell.
Using the FBA report and excel (ideally a tool like PowerBI/Google Data Studio/Tableau), you can calculate some key customer metrics such as:
Profit per customer (Customer Lifetime Value): A critical metric to see how profitable an average customer is over time (i.e. at first purchase, vs 3 months vs 12 months). This determines how much you can spend to acquire a new customer and how to allocate your ad budget more efficiently across ASINs and across keywords.
Customer acquisition cost (CAC): Calculated as ad spend / new customers. How much you’re spending on ads to acquire a new customer on Amazon. This is compared to the profit per customer to see whether you’re breaking even (and after how long).
Repeat Order Rate: The number of orders a customer places on average. Helps with breakeven ACoS/RoAS calculation as well as being a broad customer loyalty metric.
Customer Retention Rate: How many customers buy twice/three times/four times, etc. For instance 1,000 customers have bought the product, 250 bought it twice (25% retention rate on the 2nd purchase), 100 bought it three times (10% retention rate on the third purchase but also 40% retention rate from the second to the third purchase).
Most Popular Second/Third Order: This measures the most popular follow up purchase after buying a given product. This can be used to track cross/up sells as well as trial conversion rates.
