Tackle Customer Retention

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It was in the 60’s and 70’s this week. Your resident seasonally depressed guy is super happy this week.

I took some walks, hikes, and even got to the park with Noah.

We are ✨thriving ✨.

This week, I’ll be answering two questions I get pretty often:

1. How can a lean marketing / CX team tackle retention?
2. If I could focus on a handful of retention metrics, what should they be?

This newsletter is brought to you by my friends at Peel, the automated analytics platform that gives you answers to your questions before you even ask them. We use Peel at JRB and love the product and the outstanding support they offer.

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1. How can a lean marketing / CX team tackle Retention?

When I started my career in Customer Experience, retention was not widely spoken about outside of “Retention Marketing”—a role generally mislabeled and more often just a fancy name for “email marketing.”

I recall being intrigued by the intersection of CX and retention. I had QUESTIONS:

1. If the CX team is the team closest to customers, wouldn’t they be the first to know if customers are unhappy and might not return?

2. Isn’t “Retention Marketing” just waiting for folks to leave and then spamming them with discounts?

3. Why do folks eat fries with mayo when ketchup is always a better alternative? 🍟 

These are all great questions, but let’s tackle them one at a time.

Retention is relatively straightforward: if you deliver expectations across every part of the customer journey AND the product fills a customer's need, the customers will probably be back.

In a perfect universe, CX should work hand-in-hand with the growth and broader marketing teams.

At Jones Road Beauty, Retention works hand-in-hand with CX and Growth to ensure we are properly educating consumers in their consideration phase (pre-purchase).

We find that customers who know exactly what they are getting themselves into end up having a higher chance of sticking around (i.e., LTV), even if their consideration phase is a 7-day one rather than buying on their first click.

Put another way, sometimes friction is not a bad thing if it makes a customer feel more sure about their decision to purchase.

We use surveys to ensure we understand what customers want to solve for, so we can deliver tailored messaging both on email and SMS both in the email welcome flow, as well as post-purchase.

Using email and SMS to set customer expectations is key to keeping customers happy. Happy customers stick around. It really is that simple.

2. If I could focus on a handful of Retention metrics, what should they be?

When putting together a retention plan and framework, here’s the primary question I ask:

Can data help me tell a larger story?

We use Peel to put together all the slices of our customer retention story, here are the questions we need to be answered.

• What did they buy?

• How often do customers come back?

• What are they buying in their first purchase & repurchase?

• What is the dropoff? Is it order 1, or order 2 to 3?

• How much are they spending?

• Do they need discounts to be loyal?

• Who are they?

Some examples of storytelling and actions to be done with the data:

a. Metric — Repurchase Rate

Question: Which of my customer cohorts are more likely to come back and buy at least once or 2+ times, 3+ times?

Data: As you start piecing a story together, you might learn that: “within 9 months, 34% of my customers that bought this SKU or came in from this influencer have purchased again.”

Action: Maybe you create a kit or bundle that ensures customers add said SKU to their first order, or put more spend behind said influencer, even if the CAC is higher than standard FB ads purchasers, because the high LTV outweighs the higher CAC .

Remember: High LTV customers are not just more profitable, they are on the road to becoming brand evangelists that share your mission and product with others.

b. Metric — Customer Returning Rate

Question: How many customers come back every single month?

Data: You might see trends during different seasons of a bunch of customers coming back. For example, you might see that BFCM customer cohorts rarely return.

Action: As a lean retention team, it’s your mission to surface this data and make a case that it’s not all about acquisition at all costs—e.g., discounting 90% on Black Friday—but more so focusing on keeping customers around.

I’d push those BFCM folks in an Audience in Peel to track them, and sync that Peel Audience to Klaviyo so we can create unique messaging that speaks directly to them to push “product value” when pricing goes back to normal.

c. Metric — Days Between Purchases

Question: How many days does it take to make a 2nd order or 3rd order?

Data: As you start forecasting LTV and want to forecast ad spend and product runout times, this is an important metric to track. Let’s assume you see that it takes approx 22 days to get from order 1 to 2, but 46 days from 2 to 3.

Action: One of the biggest mistakes I see brands making is rushing repurchasing. Pushing folks to repurchase CPG products before they’ve finished what they already have is front-loading revenue and is not incremental.

At some point, the customer realizes they have 22 packs of cookies and will stop ordering, and then they probably will not love your brand every time they look in their cabinet of cookies slowly getting stale.

That said, if you know the approximate runout rate and have data as to when they purchase the second order, you can create a well-times repurchase flow that’ll help you accomplish two things:

1. Push them to actually use the product (e.g., recipes for food, how to apply the product, etc.)2. Help resell the product value as time goes on through thoughtful lifecycle messaging

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Data can also help you ask questions and hypothesize solutions. Some questions I’ve seen brands ask and then strategize around:

• What is the AOV for returning customers vs. first-time customers?

• What does my retention look like for my non-subscribers?

• What SKUs are customers buying on repeat orders?

Or even within a specific bundle or kit:

• How many people that purchase this specific kit come back & buy again?

• What is the LTV of customers who had this bundle in their first order?

• How long does it take for them to come back & purchase?

• What do they buy when they come back?

We love to use Peel’s Basket Analysis and Top Product by Order to better understand what products do well together, and for the ideal customer journey.

Strategizing around these specific customer journeys can help you learn a lot more about ideal customer journeys. It’s what drove us to launch the 101 Set at Jones Road; it was all based on data we learned from in Peel.

That was a whole lot of data stuff for one week. If you’ve made it this far, I appreciate you hanging with me!

For this week’s CX Chronicles, I’m thrilled to have Zoe Kahn, Senior Associate of Customer Experience at Chomps, high-quality & sustainably sourced meat sticks sold at 18,000 stores nationwide as well as online at chomps.com.

Aside from being a great friend and moderator in our CX discord, Zoe is also a finalist for the “CX Operator of the Year” CPA award from Get Repeat. Thrilled to have Zoe with us today!

1. What is your CX Philosophy?

Mine is pretty simple. Focus on the feelings. Make consumers smile, make them ✨feel special✨—because they are. From personal experience, we're more likely to be loyal to companies we vibe with. I believe people nowadays are focused on surrounding themselves with people and products that enhance their day (in more ways than one).

If this isn't their focus now, hopefully, it will be in the future because it affects happiness. No matter what brand I'm working with - making the consumer feel good MUST be at the forefront. If it isn't—I DON'T WANT IT.

The cool thing is, there are so many ways to execute this philosophy. Truly listening to the consumer (not only by reactive responses to complaints but by probing the consumers and encouraging ANY and ALL feedback), sending surprise and delight gifts, making the packaging of the product whimsical, improving brand voice, and much more. I could go on, but I don't want to hijack Eli's newsie. Maybe another day 😉

2. What is your favorite Chomps CX Story?

I'm gonna cheat and give two. (Sorry, Eli—you invited me and I'm breaking the rules). As I said before, this consumer happiness-focused stuff is my sh*t.

When I was recruited to work at Chomps, I was researching their current CX. One thing that stood out to me was: on every Chomps stick, there's a little quote called "Chompspiration." There are hundreds of them, so you usually get a new one with each stick. I STILL look forward to reading them every time I eat a stick.

When I saw this, I knew that the owners of Chomps (Pete and Rashid) care about their consumers. It's more than a beef stick.

Now to the story, we had a woman email in a story that she spent a lot of time in and out of the hospital and was so busy that sometimes, Chomps were the only thing she could manage to sneak in during her non-stop schedule. She had many rough days and said that some days, the only thing that pushed her to keep going was the Chompspiration she would read on the sticks. *cue the waterworks* 😭 

This is an example of how you can touch the heart of everyone who gets a hold of your product.

My next fav story is unique because it was actually about a customer we were losing. We had a woman email in who needed to cancel her subscription due to her strict diet while battling a certain type of cancer.

Kate (my CX sidekick at Chomps) brought this to my attention so we sent her some flowers and a personalized note. We wanted her to know that even though she isn't able to use our products now, we still care deeply about her and hope she gets well soon—whether she can be a customer again or not.

It's empowering to have this freedom to work in a company that encourages us to invest in our customers' feelings. Although these efforts can be hard to track quantitatively and we cannot go back and say "our ROI on this project was…," we know retention pays off when our consumers feel the love. 💓