A customer who came in at 25% off meets your full price for the first time when they go to reorder. If nobody planned that moment, the retention team writes a campaign with another code in it, and the customer learns that every order comes with one.

When to make the second offer

The right moment is when a customer is about to run out, lose interest or forget you, whichever comes first. You can read it from your own data:

• Median days from first to second order, for customers who did reorder, split by first product. Consumables have a clock; fashion has a season; durables have a long gap filled by accessories.
• The drop-off curve. Of customers who reorder within a year, what share have done it by day 30, 60, 90? The curve flattens at some point. The second offer belongs just before it flattens, not after.

Chapter 7’s door table gives you the split. The refillable door has a short, reliable clock. The gift box door may have no clock at all, and its second offer is a different product for a different person.

What the second offer should be

1. A reason, before a discountThe customer’s next job, not your next promotion. The refill, the piece that goes with what they bought, the thing people who bought what they bought usually buy next. Chapter 12’s basket data works here too, on second orders.
2. A price that matches what the first one taughtIf the first order was introductory, say so on the first order and show the reorder price then. Anderson and Simester’s first-time customers kept buying because later prices matched the lesson (chapter 4).
3. Loyalty currency instead of a codePoints earned on the first order, a gift at the second, early access. It spends a currency you print instead of the margin on every order (chapter 17).
4. A discount only when the data says it paysWhich is less often than it looks, because of the next section.

The cost nobody counts: people who would have reordered anyway

A second-order discount goes to everyone who uses it, including the customers who were going to reorder at full price. If 20 of every 100 customers reorder without an offer, and a 15% offer lifts that to 26, you’ve bought 6 extra orders and given 15% off 26. Whether that pays depends on numbers most teams never put side by side. The tool does.

A reorder discount is paid on every reorder, including the ones you already had.

With the example numbers, a 15% offer that lifts reorders from 20% to 26% loses money: it gives away more on the 20 reorders you already had than it earns on the 6 new ones. The same offer aimed only at customers unlikely to reorder on their own, past the point where the curve flattens, looks very different. Target the discount at the lapsing, not the loyal.

Do this

• Find the day your reorder curve flattens, by first product. Put the second offer a week before it.
• Hold out one in ten customers from every second offer. Without the holdout you can’t fill in the second field of the tool honestly.