The 80/20 Rule In CX & Retention

Hi Team!

A weekend wedding in Richmond, Virginia, kicked off the week. That was followed by a Tuesday night red-eye to London, landing me right into two days of an ecom conference.

As I write this, I’m sitting in a pub—literally. The Culpepper is a charming little spot in East London, with a handful of bedrooms upstairs above the pub. It’s been an interesting experience, to say the least.

We’re also working on a pretty exciting marketing campaign at Yotpo right now, focused around our top customers (more on that next week, shh), and it’s gotten me thinking about the Pareto Principle—or, as many know it, the 80/20 rule.

In simple terms, it’s the idea that 80% of results come from just 20% of efforts. In CX and retention, this rule plays out in quite a few ways.

Today, I wanna briefly chat about two things. 

First, some interesting examples where Pareto’s Law plays out. 

And second, practical ways where focusing on the important 20% can actually completely change how you think about your business.

Ready? Let’s crack on, then. (Sorry, London.)

This week’s newsie is brought to you by Siena AI!

This week, we’re spotlighting Siena AI, the pioneer and category creator of Empathic Autonomous AI Agents.

I'm not one for typical ad reads, but I've gotta tell you about the cool stuff Siena's been up to. They're constantly shipping new features based on what their community actually needs. Here are three that caught my eye:

What Makes Siena Stand Out:

• Siena Copilot for Kustomer and Zendesk: This helps your human agents craft better responses. When full automation isn't possible, agents input context and get AI-generated replies. It's like having an expert assistant for every interaction.

• Loop Returns Integration: Siena now handles the entire returns process in chat - initiating returns, sending labels, processing exchanges, and giving status updates. It's making returns way less of a headache.

• Custom Integrations: This is a game-changer. Just like you'd train a new agent on your tools, Siena needs access to your unique tech stack. Now you can create code-free integrations for any tool you use. Siena can pull info and take action based on your instructions, fitting perfectly into your existing workflow.

Some recent fantastic webinars on the success stories:

• Coterie: “We've been able to give the team time to slow down and create experiences when experiences matter. It reduces the sense of overwhelm. Sometimes as the inbox is climbing as a CX agent, you're thinking of your SLAs and you're stressed about what's next. And so you don't provide the best level of service that you could. And I think having Sienna has alleviated some of that for the team so that they can really focus again on just creating experiences for the tickets that they do have to handle and solve.”

• Madhappy: “The one thing I'll leave everybody with is if you're apprehensive about AI, just test it out. I have not seen a single person disappointed by it. And I know besides ourselves, I know a number of companies using Siena and I've not heard one person have a bad experience with it. It will definitely change your customer service department for the better. 

- Todd Baxter, COO Madhappy

• Simple Modern: “It's really difficult to tell that Hallie is not a real person for folks. I don't feel morally compromised in that. Customers are happy. We're happy and more efficient. They're getting a better customer service experience than they would have otherwise, frankly.

— Burke Lewis, Director of Ecommerce at Simple Modern

What I love is how Siena co-builds with their users. It's not just another tool; it's like they're part of your team, constantly evolving to fit your needs.

Siena is offering my readers an exclusive 3-month free trial and free access to the Certification Program. Just hit up their team and drop my name, Eli Weiss. 

If you are looking to get ready for holiday chaos and want to get prepped, check out this upcoming free webinar from Siena:

Turning Holiday Chaos into Cheer: How Siena Can Transform Your BFCM

Sep 24, 2024 1:00PM EST

The 80/20 Rule in Retention:

For most businesses, 80% of revenue comes from just 20% (or less) of their customers. I recently heard that a massive fashion company sees 80% of their revenue from 4% of their customers!

These loyal, repeat buyers who drive the bulk of your revenue. But how do you keep these customers engaged and also identify and nurture potential high-value customers early in their journey? 

Who Are Your Top Customers?

Your top 20% are the customers who have already bought into your brand—literally and emotionally. They’re your most loyal buyers, and they’re likely spending the most, recommending you to others, and coming back time after time. They’re the backbone of your revenue, and focusing on retaining and nurturing them is where the 80/20 rule shines.

The real opportunity is identifying these customers before they reach that stage, early in their customer journey. The quicker you recognize who’s on a path to becoming a top customer, the faster you can engage them with more targeted strategies to increase their loyalty and LTV.

What Do Top Customers Have in Common?

If you’re looking to create more high-LTV customers, it’s important to understand what your top customers have in common. 

One commonality, although not surprising, is that many top LTV customers are wealthy. 🙃🙃

While you can’t exactly put more money in people’s wallets, you can look for other shared behaviors or preferences that signal a customer’s potential value early on.

For example, at Jones Road, we discovered that customers who purchased from multiple product categories early in their journey tended to have a higher LTV. This wasn’t necessarily a guarantee that they’d become top spenders, but it was an indicator worth testing. 

Encouraging customers to explore across categories could point to a correlation between variety of purchases and long-term loyalty. Correlation or causation? It’s tough to say definitively, but it’s worth investigating. 

The key here is to identify patterns early and test strategies that help guide potential top customers down a path of deeper and faster engagement with your brand.

How Do You Nurture Potential Top Customers?

Once you’ve identified those early signs of a high-LTV customer, the next step is to nurture them differently from the rest. You don’t want to treat these potential top customers the same way you treat your one-time buyers or casual shoppers. 

They require a nurture flow that is more personalized and aggressive to cement their loyalty and drive future purchases. Note: I did not say an annoying one. 

Here’s how:

1. Aggressive Personalization: Once you have a sense of who might become a top customer, go all in with personalization. Use their data to recommend products based on what they’ve already shown interest in and make them feel like they’re part of an exclusive group.

2. Email and SMS: Give these customers a more varied experience in your emails and SMS communications. Introduce them to different products, and cross-sell categories, and make sure they know what’s available beyond their initial purchase.

3. Direct Mail: Sometimes, the old-school methods work best. Sending potential top customers your full catalog could open their eyes to the breadth of your product range and prompt them to explore more.

The 80/20 Rule in Email and SMS Specifically:

There’s been a trend on Twitter lately where agency folks are telling brands they aren’t sending enough emails. The answer, they say, is to send more. 

But here’s the reality: 80% of your email and SMS revenue likely comes from just 20% of your customers—the ones who actually engage. Bombarding everyone else with more emails won’t magically turn them into loyal customers. 

Instead, send more to the ones who engage and chill with the rest.

I know this might not be new or novel, but 90% of brands have zero segmentation or personalization.

Your top 20% of customers—those who open, click, and buy—are the ones you should be focusing on. These are the people who want to hear from you.

Send them more: exclusive offers, early access, or personalized content that keeps them engaged and coming back.

For the other 80%, hitting them with more emails won’t help. If they’re not engaging after a few attempts, it’s time to ease up. Flooding their inbox or phone will only lead to unsubscribes or spam complaints. Instead, give them space and focus on making the few emails you send more relevant.

Email and SMS won’t force someone into submission. Instead of trying to win everyone over with volume, focus on building deeper connections with those already listening.

The 80/20 Rule in CX:

When it comes to customer experience, not every inquiry deserves the same level of attention. About 20% (or less) of interactions are where the magic happens—the ones that truly matter. 

These are the moments where your team can make a lasting impression, solve a problem in a way that builds trust, or turn frustration into loyalty.

The 20% That Really Counts

Not all tickets are created equal. The ones that need empathy, creativity, or a little extra human touch—that’s your sweet spot. These are the moments where your team can step in, read between the lines, and deliver more than just a solution. It’s the difference between "fixed" and "memorable."

Example: Let’s say a customer reaches out about a rare order issue. Sure, you could just offer a basic fix, but if you really understand their frustration and go the extra mile—maybe a personal apology or even throwing in a discount for next time—you are creating a moment that sticks.

Of course, not everything needs this level of effort. A big chunk of tickets—tracking updates, simple returns, password resets—are just routine noise. You don’t need a human to handle that. And that’s where AI (like Siena) can help. Automating these repetitive, low-stakes inquiries frees your team to focus on the tickets that actually matter.

The reality is that automating these 80% of tasks lets your team save their energy for high-value interactions. Coterie’s done this well—they use their AI assistant, Siena, to handle the monotonous stuff, which gives their CX team the space to work on the interactions that drive loyalty.

As Paige Zachs, VP of Supply Chain Operations at Coterie, puts it: “The beauty of AI is that it takes care of the volume, so our team can focus on delivering the thoughtful, high-value experiences our customers remember. It’s the balance between operational efficiency and human connection.”

Automate the tasks that are purely functional, and make sure your team is ready to go deep when it counts. At the end of the day, it’s about knowing which moments deserve that human touch. 

You’ve got automation to take care of the repetitive stuff and let your team shine with the high-touch, thoughtful interactions. That’s where the real customer loyalty is built.

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 💛

P.S. Looking for inspo on your next email/sms campaign?

I know you will love this.