The failure to achieve 100% repeat-buying might indicate a loss of
consumer demand or acceptance and presage a catastrophic decline in
sales. On the other hand, it might be that a large turnover of customers
is quite normal under steady sales conditions, with the lost buyers
constantly, being replaced by new buyers (the “leaky bucket” theory).
Or perhaps the “lost” buyers merely lapse for a time and normally
come back again later.
But what really happens in terms of repeat-buying, and what its
implications are, is broadly speaking the topic of this book. Is the
month-by-month incidence of repeat-buying for Brand X really 60%?
And if so, is 60% in fact “high” or “low” - as many as 60% repeatbuyers,
or onZy 60% repeat-buyers? What does this depend on? Are the
implications of 60% “good” or “bad” or “normal”? Is there additional
erosion of a brand’s repeat-buying franchise in time-periods further
apart? And what are the underlying mechanics of brand-choice and
repeat-buying generally? Are there generalisable norms of behaviour?
Some interpretative background of knowledge is clearly needed.
Repeat-buying is any situation where a person buys the item in question
more than once. It can be studied in different ways, but these must
ultimately lead to the same insights and the same practical conclusions.
The justification of the particular analytic approach taken in this book
- which turns on the NBD/LSD theory - is that it works in practice in
giving simple and interrelated results which hold under a wide range of
conditions.
The main result is that repeat-buying of any item from any frequently-
bought branded product-field tends, within certain broad limits, to
follow a common pattern and can be dealt with by one single theory,
irrespective of what the brand or product is and irrespective of what
other brands its buyers may or may not have b&ght as well. This
simple result is noteworthy, given the large variety of different conditions
under which buyers make their purchasing decisions. It makes it
possible to establish an empirically-based theory and to discern simple
interpretative norms to assess whether any particular observation (e.g.
the 60% incidence of repeat-buyers month-by-month) is high or Zow, or
perhaps merely normal