Time Between Purchases

What is Time Between Purchases?

Time Between Purchases indicates the average number of days a customer takes before making another purchase, within a year-long period. Analyzing your customers’ Time Between Purchases will allow you to establish their regular buying patterns, and tailor your sales and marketing strategies accordingly.

Time Between Purchases is a KPI that applies mainly to retail and e-commerce. It’s an important KPI for your sales, marketing, and finance teams to monitor.

Why is Time Between Purchases important?

Time Between Purchases is important because it allows you to target your marketing and sales strategies to customers not only on the basis of demographics or potential use cases, but on the basis of time. Time is a critical factor in sales, and knowing when to market your product based on customers’ consumption patterns is an excellent means of establishing brand loyalty.

How to calculate Time Between Purchases

To find your Time Between Purchases, divide your customer’s number of purchases by the relevant time period (usually counted as 365 days/one year).

If you wish to find a single data point of Time Between Purchases, subtract the date/time of your customer’s second purchase from the date/time of their first.

Best practices for Time Between Purchases

Time Between Purchases is an incredibly valuable metric for understanding your customers’ purchasing habits. Being able to establish their purchasing habits on a temporal basis is the ‘missing link’ to understanding how your product is being bought and used.

That said, it will also be useful to break down Time Between Purchases on a demographic basis, so you’ll know when specific consumer segments purchase and use your product. This can further inform your marketing and sales strategies and customer outreach.

Be aware that typical Times Between Purchases will vary by industry. A higher-than-average Time Between Purchase will go in tandem with a high Inventory Turnover, as this indicates your product is being bought and sold rapidly.

You can use CRM software, BI (business intelligence) tools, or automation platforms to track your customers’ Time Between Purchases.

Other KPIs similar to Time Between Purchases include:

• Repeat Purchase Rate
• Inventory Turnover
• Accounts Receivable and Accounts Payable