Three Simple Retention Frameworks

Hi Team,

We are halfway through April (whatttt) and finally seeing some warmer weather. There's barely any sun, but I’ll take weather in the 50s. 

I had a blast meeting many DTC folks at the Whalies yesterday, and I am still recuperating from all this extroverted activity. 

This week, I want to talk about an issue that comes up frequently in our circles, but we rarely see any actionable tips or tricks to help marketers do better.

There are loads of courses, masterminds, and thought leaders that share everything you need to know to get started on running ads and make your first million in sales, but only a few give practical tips on getting those customers to buy again. 

Over and over, I talk to founders of successful businesses that have done millions in revenue before realizing that 80-90% of their customers have only purchased once. They played a CAC-LTV game without the LTV game meaningfully working. 

The question is always, “How can I get more of these one-timers to purchase again?”

Yes, retention touches every part of the customer journey blah blah blah, but there have to be some practical tips aside from the lofty “improve every part of the customer journey.”

I’ll admit I am part of the problem.

I share fluffy “make sure your reality meets the expectations you set for your customers…” type of content myself.

But hey, I’ll try to do better today.  

Pull up a chair. We’ve got to talk. 

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Oh, and don’t forget to check out one of my industry besties’, Jess Cervellon’s new podcast, The Juice with Jess, which is powered by Kustomer too!

Every Thursday, Jess drops new episodes where she sits down to speak to Marketing & CX Leaders across the industry about customer-centric strategies ranging from acquisition to retention. 

A very special guest, aka myself, is on this week’s episode. 😅

Okay, here goes.

I know we don’t have the time and space today for a complete retention guidebook, so we’ll choose 2.5 frameworks I would love to consider when thinking about retention. 

#1 - It’s Easier To Accelerate Existing Behavior Than To Create Net New Ones:

Too often, we live on the optimistic side of the spreadsheet.

We look at our LTV (Customer Lifetime Value) and AOV (Average Order Value) goals and strive for the moon. 

We create massive product bundles to push customers to fill up their carts and try to force customers into multiple categories. We shamelessly shill everything in our product catalog.

There is undoubtedly math to be done on what profitability looks like and how large your AOV needs to be to break even or be profitable.

Still, you’ll have a much easier time getting customers to come back when you not only choose the path of least resistance but also choose to accelerate existing behavior in the future. 

For example, suppose you know that 60% of your customers who purchase mascara order your foundation after that instead of pushing folks to buy a massive bundle of skincare with higher AOV.

In that case, you might have an easier time just sending them to the foundation by highlighting fantastic customer reviews or a candidly written, plain-text email. 

My hottest of hot takes is this: email and SMS won’t easily change your customer's entire lifestyle; it’s not as strong as you think. 

#2 - Learn More About Your Worst Customers:

We run post-purchase surveys to learn where people heard about us and why we chose us.

We then run surveys to our VIP customers to learn what they want to see more of. But we don’t talk nearly enough to the one-and-done customers. 

Let's flip that script. Why not start a convo with the folks who bounced after their first buy? 

It could be the product that didn't vibe with them, or the aggressive 25-email post-purchase flow was aggressive and scared them away.

Heck, they forgot about us. (Ouch, but fair.)

Both quantitatively (send a Typeform survey) and qualitatively (get on some Zoom calls), there is a ton you can learn from the one-and-done customers to impact your repeat customer rate.

A while back, I consulted on a brand with a delicious product and a similar issue: 80% of their customers were just not repurchasing. 

In running some surveys, they uncovered that while spamming their customers a ton to repurchase in the 30 days post purchase #1, most were not finishing the product in less than 45-60 days. 

By then, they had been unsubscribed from emails, and the product was a good-to-have, not a must. They just remembered that they had to repurchase. Your fancy CPG brand is not a necessity.

Changing up their email and SMS post-purchase flow did more than they ever imagined. 

It is easier to promote existing behavior than to try to create net new ones.

#2.5 - Great Retention Starts With Solid Acquisition:

I know this tip might fall into the “old me” bucket, giving tips that are not super actionable.

Bear with me, though; this is an important one.

OG’s might remember this story as I shared it a while back.

We ran an ad at OLIPOP that did super well for acquisition but struggled to get any folks who came in through that ad to buy again. We needed help figuring out why.

When digging and analyzing, we learned the video was a gorgeous pour-shot with Vintage Cola running down a glass of ice.

It felt refreshing and Coca-Cola-esque, but it said nothing about why this soda was 4x the price of a can of Coke.

When these customers got their Vintage Cola from OLIPOP, and it was not 4x the taste of a Coke, they would obviously not buy it again.

We needed more friction in the funnel. 

They needed to be educated on the value, not just acquired. 

So many retention teams are dealt a “hand” of customers that are pretty impossible to retain because they should have never purchased from the brand in the first place.

They may not be the right TAM but got tricked into it; they may not be clear on what the product is, and the ad does a smooth job pulling them in.

This is a larger topic, though, and maybe one to hit on in the coming weeks. 

P.S. Three years ago, I offered similar style guidance for the customer experience sector, sharing four insights that fueled OLIPOP's sevenfold growth in monthly revenue within a year during our early days.

The link to those tips is below; yes, they are all still highly relevant. 

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers, 

Eli 💛