Customer Recency

This term refers to the amount of time that has lapsed since the last purchase. While there is a lot of emphasis on frequency of purchase and the number of times that a customer comes back, recency is the one metric that can actually help businesses to a large extent. When tracked, recency can help create targeted communication that is more effective due to the timeliness of the communication.

While there are other aspects such as the content of the communication, offers, discounts and more that also impact customer behavior, the timing of the communication is paramount. Tracking campaigns across various companies has shown that when the first email is sent seconds after the customer signs up for an account, it is likely to have the highest open, click through and conversion rate as well.

Scores for recency can also help marketers decide when it is time to bombard a satisfied client with more information. Customers do not like being sent emails when there is no specific information to be provided. Decisions about offering discount coupons, special invites and the like can be taken if a customer has not paid you a visit for some time. Based on the recency figures, marketers can also decide to have a cut off time frame to connect with the customer lest they lose out on a valuable asset completely.

Examples of purchase recency

• A retailer can measure when was the last time a customer visited their store
• A hotel can track the last time a guest stayed in their hotel
• A bank can find the time since the last login to their online banking
• A telephone company can track the number of upgrades
• A distributor can count the number of purchases

A simple A/B test on an add correlated with the customer's recency can give you very valuable information. Recent customers have higher potential since they are more likely contributing to profits, therefore any marketing activity that attracts recent customers will contribute more to your bottom line. For your next activity, track ads and compare against customer recency, the one ad that responds better to recent customer provides more value and should be used in future marketing endeavors.

To see our list of customer analysis examples and the top 10 customer metrics businesses should track visit our Customer Analysis Examples page.