Procter & Gamble has a name for the moment this guide is about. A.G. Lafley, its chief executive, called the shopper’s choice at the shelf the first moment of truth. The second moment of truth comes at home, when the customer uses the product and finds out whether it keeps the brand’s promise Reported. A DTC brand spends most of its budget on the first moment. The reorder is decided at the second.

The payment fades

John Gourville and Dilip Soman studied what happens between paying and using. At a health club whose members paid dues twice a year, attendance was highest in the month after each bill and fell away over the months that followed Published. They called it payment depreciation: the sense of having paid, which pushes people to get their money’s worth, wears off with time.

It shows up in theaters too. In an older study by Hal Arkes and Catherine Blumer, people who paid full price for a season of plays attended more of the first half of the season than people who got the same tickets at a discount. By the second half, the difference had gone Published. Soman and Gourville then looked at theatergoers who bought several plays for one price. They were more likely to skip a given play than people who had bought a ticket for that play alone Published. One price for many uses blurs the link between each use and its cost.

Why it matters for renewal: in Gourville’s own summary, gym members who feel they got their money’s worth in year one are more likely to renew in year two Reported. Ruth Bolton and Katherine Lemon found the same loop in services: how much customers used a service shaped how satisfied they were, and that satisfaction shaped how much they used it next Published.

The sense of having paid is strongest on delivery day. Every day the box stays shut, it weakens.

What this means for a DTC brand

• Delivery day is your billing day. The pull to use what they paid for is strongest when the box arrives.
• Big first orders are season tickets. A three-pack, a bundle or a 90-day supply is a prepaid package. It can be good value and still leave more product unused, for the reason the theater study found. If you sell them, the first-use work matters more, not less. Bundles and first-order offers are covered in The First Offer.
• The repeat gap is partly selection. People who use a product fast were often keener to start with. Some of the gap between users and non-users would exist whatever you did. The honest question is how much of it you can move, and only a holdout answers it. The tool below makes you say your guess out loud.

A worked example

Say a brand gets 10,000 first-time buyers a month. Its survey says 60% have used the product within 14 days of delivery. Those users reorder within 180 days at 35%; the non-users at 12%. The blended repeat rate is 25.8%. Now suppose a better first move and a cue in the box shift 10 of the 40 non-users in every 100 to early use, and suppose only half the 23-point gap is caused by use rather than by who the buyer is. That adds about 1.2 points of repeat rate: 115 more repeat customers a month. At $60 of contribution per repeat customer, that’s about $83,000 a year, or $0.69 of first-use work per buyer before it stops paying Derived.

With the defaults, the tool gives the worked example’s $82,800 a year and $0.69 per buyer: enough for a better insert, a cue, a plan prompt and a few spaced messages.

Do this

• Split last year’s first-time buyers into early users and non-users, using whatever signal you have (chapter 3 lists them), and compute each group’s 180-day repeat rate. Put the two numbers in the tool, with 50% as the causal share. That’s the size of the prize in this guide.