Forum Discussion
Repurchase Percentage
Hello all, this one is eluding me on where to begin. Any help would be greatly appreciated.
Here is the dataset, I have a line by line dataset with date, accounts, material/product name, and some additional information but I think that will be all that is needed.
Ship to is the account association I'd like to base off of and material is what I am searching for.
Goal - I would like to find out what the percentage is that by account, once a product is purchased, that it will likely be purchased again.
For example
Account A buys a can of Sprite.
based on the historical purchases, what is the likeliness that Account A will buy sprite again?
I can use this to then see what products are most likely to be repeat purchases and then push those sales for a more long term revenue goal.
This one is a bit over my head, I really appreciate the help.
1 Reply
The problem is not well formulated. It does not have a definite answer (or any answer at all for that matter, I'm afraid). I'll tell you why. First off, the probability of a repurchase depends on the time horizon. That's for sure because you would expect that on a longer time horizon the probability is bigger than on a shorter one (what's the probability of a repurchase within 1 day from the last purchase and what is it within 1 month of the last purchase?). Secondly, the probability depends on where the time horizon is placed on the time axis. Third, I can't see how you'd like to calculate this since you've not given any algorithm.