In plain words
A one-time purchase is a single order with no commitment to further ones. On a page that also offers a subscription, it is the option for customers who are not ready to commit.
It usually keeps more on the first order than a subscription does, because it carries no acquisition discount. And then it stops. The subscription starts behind and catches up over its renewals. The choice between pushing one or the other comes down to how many renewals a subscriber really stays for.
Formula
- Value of a one-time buyer = one order's margin
- Blended value per customer = Σ (each option's value × the share of customers who choose it)
Worked example
A one-time buyer of the $40.00 bag is worth $15.36, all of it on the first order. A subscriber is worth $53.29 over twelve months, and passes the one-time buyer at order 3.
If six customers in ten buy once and four subscribe, the engine puts the average customer's twelve-month value at $30.53. At an acquisition cost of $30.00, that mix pays back only in month 12.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| Cost of goods | per unit | −$12.00 |
| Pick and pack | per order | −$1.18 |
| Packaging | per parcel | −$0.50 |
| Shipping label | per parcel | −$7.50 |
| Card fee per order | per order | −$0.30 |
| Refunds | percent | −$2.00 |
| Card processing | percent | −$1.16 |
| Contribution margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
A one-time purchase is not a lost subscriber
Many one-time buyers would never have subscribed, and some come back on their own. The comparison is between the page with a subscription option and the page without. Counting every one-time order as a failed subscription overstates what the subscription adds.
Using it
Report one-time and subscription orders apart, and track how many one-time buyers reorder without a contract. If most of them come back anyway at full price, a subscribe-and-save discount is partly paying for loyalty you already had. Price the two options so that either choice is one you are content to sell.
In Offer Suite
In Offer Suite a line is bought either once or on subscription, and a first order with a subscription line is a subscription order. Costs can be set to apply only to one-time orders or only to subscription orders.
Source: Offer Suite's margin engine.