The Life Cycle of Frequency
In some businesses, customers make a transaction every day. In others, it might only be once a year, or every few years.
Coffee shops have customers that come in every day. Business consultants may see their clients monthly or quarterly. Every type of business has a different level of customer frequency.
How often do your customers need your product or service?
How long do your customers continue to buy from you, and how frequently do they purchase?
Understanding the concept of cycle frequency helps entrepreneurs interact with customers in a meaningful way and set expectations.
Your dentist’s office always schedules your next appointment while you are still sitting in the chair.
The bakery gives you a free coffee or pastry for every certain number of transactions you have with them.
Here we want to focus on the average customer, not the exceptions. If 90% of your customers purchase from you once a week, that is your average cycle of frequency.
While a customer may buy from you as often as you think appropriate, there may come a time in which they simply stop buying from you. We all understand the one-offs, the people who’ve come in from out-of-town or only needed your product/service one time.
Meanwhile, there is an average of how long a customer stays with you, and you should have at least an idea of what that time frame is, whether it is one week or ten years.
Knowing the frequency of your customer’s purchases helps you project your revenue, predict trends, keep your pipeline full, and stay fresh.
BEFORE YOU GO:
We see our blogs as opportunities for dialogue. Please share your thoughts as comments.
- What do you know about the frequency in which your average customer buys?
- What tools or resources do you use to track your cycle of frequency?
- What advice can you share with others in this regard?
Faris Alami is Founder and CEO of International Strategic Management, Inc. (ISM). He works internationally, presenting Exploring Entrepreneurship Workshops and other entrepreneurial ecosystem — related ventures.