Predicted spend tier

Predicted spend tier is a prediction of your customers' spending potential in the future.

Predicted spend tier is estimated by analyzing your customers' past interactions with store including the following:

• how often a customer made purchases
• how much the customer spent on average per order compared to the overall average spent per order
• how many orders the customer placed
• how recently the customer placed their last order

If your store qualifies for predicted spend tier, then after the predictions are made, your customers are categorized into the following tiers:

• High
• Medium
• Low

Predicted spend tier and customer segmentation

You can use the predicted spend tiers in conjunction with customer segmentation to group similar customers together into a customer segment.

For example, if you want to create a customer segment of your high-value customers who subscribed to your marketing email, then in the editor on the Customers page, enter the following segment:

predicted_spend_tier = 'HIGH' AND email_subscription_status = 'SUBSCRIBED'

Learn more about customer segmentation.

Using predicted spend tier to make strategy decisions

You can use predicted spend tier in the following ways to develop strategies for increasing your sales:

• to analyze which customers are of high value to your store so that you can include them in a valued-customer marketing campaign
• to convert low-value customers into medium-value customers, and medium-value customers into high-value customers
• to encourage customers in a particular tier to make more purchases by offering them promotional codes for exclusive products
• to determine what type of products customers in a particular tier buy and offer those customers discounts on similar products

Understanding the value of a customer can help you to budget how much you should spend on acquiring new customers and to analyze the return on investment (ROI) from your marketing efforts.