From a total of 932 customers, only 25% make a second purchase within the 4 month time frame..
However, of the customers that make a second purchase, more than 50% of them make a third one. This
pattern repeats for the fourth and fifth purchase.
Study 2 – Transaction frequency and initial monetary value positively affects to customer lifetime
value. On the other hand, initial recency indirectly affects customer lifetime value mediated by
transaction frequency.
Method
The number of repeat purchase or transaction frequency in study 1 affected by perceived value and
recency has direct effect to customer lifetime value. Monetary value also has direct effect to customer
lifetime value. In study 2, our definition about monetary value is the total dollar value at the first
purchase. Then, we define it as initial monetary value. Initial recency has indirect effect to customer
lifetime value mediated by transaction frequency. Regarding the customer lifetime value, adapting from
previous study [38], we define it as each customer lifetime value for the first quarter or 4 months. We
calculated it from the moment when each customer did the first purchase until the next 4 months.