The goal of this table is to understand whether the first product purchased by a customer influences their LTV (Lifetime Value).
To achieve this, we’ve divided customers into cohorts based on:
The month of their first purchase
The first product purchased
Each cell shows the average LTV of the customers in the cohort. This is the average of all their purchases (including the first order).
Example for a store selling posters:
Among customers who made their first order in December 2023:
Those who bought a Star Wars poster generated an average of €375.
Those who bought a Game of Thrones poster generated an average of €1949.
Note: If a customer from December 2023 bought both posters in the same order, they belong to both cohorts. However, given the significant difference in LTVs, it seems unlikely that many people fall into this category.
What to do with this information:
Target potential Game of Thrones buyers:
Put more emphasis on promoting Game of Thrones posters in your marketing campaigns. This could attract customers with a higher potential LTV.
You might also want to analyze what makes these customers more valuable. For instance, do they purchase more products or buy more frequently?
Optimize the offer for Star Wars buyers:
Think of ways to increase the LTV of Star Wars buyers. This could be through specific re-engagement campaigns, bundled offers, or even product suggestions to purchase after the Star Wars poster.
You could also test different types of offers or promotions to see if it helps increase the value of these customers.
A/B test your acquisition strategy:
If you want to go further, test different acquisition strategies for these two customer segments. For example, you could test special offers for Star Wars and see if that boosts the average LTV.
Track long-term trends:
Monitor these cohorts over time to see if these trends hold. It’s possible that Star Wars buyers have a lower LTV initially but come back later for additional purchases.
Note: These are fictional advices, if you need custom guidance feel free to send us a message!