The Importance of Customer Assimilation

Assimilation pertains to the strategies and supporting tactics of enhancing a buyers’ first-time purchase and post-purchase experience from a company so that a new customers feel compelled to make subsequent purchases and to recommend the company to others. In working with clients, I’ve found that most businesses consider first-time buyers as “active customers”; however, in reality a customer isn’t really a customer until he/she begins making additional purchases after the first one.

The late Bob Stone, a marketing legend, created his Thirty Timeless Direct Marketing Principles.  The second principle was: “The most important order is the second order.  After you have obtained the second order, you have achieved a ‘buying habit’.”

Proof of this became abundantly clear to me while serving the direct marketing needs of a large insurance provider for farmers.  I say that for the following obvious reasons:

Insurance policies carried

Active number of policyholders, Year One Number of policy cancellations Attrition percent Active number of policyholders, Year Three

Persistency Percent

One policy

72,034

29,264 40.6% 34,686

48.2%

Two policies

50,526

9,968 17.7% 37,731

74.7%

Three policies

16,287

1,137 7.0% 13,771

84.5%

Four policies

5,353

231 4.3% 5,122

95.7%

As a long-term policyholder and member of USAA since being commissioned in the Navy 50+ years ago, I can attest to this on a personal basis – beginning only with an automobile policy.  Today, my wife’s car and mine are insured by USAA, our home is insured by USAA, and we carry USAA’s credit cards.

I welcome your questions and/or comments:

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