Jimmy Kim argues that most first-time buyers never return, but customers who make a second purchase become dramatically more likely to buy again. The real loyalty threshold isn't acquiring customers—it's getting them to order twice.
Repeat purchase probability compounds. After a first purchase, the odds a given customer ever buys again are low. Not kind of low, but they're genuinely low. And depending on the category and the study that you look at, a good chunk, like a large majority of first-time buyers, will never ever come back. But the moment that someone does make a second purchase, the likelihood and the probability that they make the third does increase dramatically. And if they do it a third, fourth, etc., it continues to climb again. And the curve is quite steep and bends hard to the right at that order 2 kind of threshold. And really what that tells you is that the customer relationship isn't this linear thing that a lot of marketers believe it is. You don't earn loyalty a little bit at a time with each order. There is this threshold and that threshold sits between that first and that second purchase. So if you can get someone across that threshold, the entire lifetime value of that profile changes. And if you don't get them there, everything you spend to acquire them basically is kind of like a rental if you think about it like that.
