Over the past year, retention has become one of the buzziest terms in eCommerce. Repeat, a personalized CPG reordering platform, sits at the cutting edge of the retention landscape and works with category-defining brands like Huron, Osea, Hydrant, Lemon Perfect, and Blume.
Retention as a DTC Growth Driver
The first version of Repeat’s software was used for Kim’s own DTC brand, UNDR, which launched in 2017. Her team experienced the complexity of getting customers to reorder in a delightful and frictionless way. With these learnings in mind, she wanted to build something better - something with the consumer replenishment experience at the core. What she built worked for her own brand, so she wanted to share it with the world, thus Repeat was born.
In Kim’s words, “We lived our way to the problem, and we’re now solving it for other brands.”
Retention is a much broader topic than most people think. At Repeat, the team believes brands will stop referring to it as retention. Rather, they prefer to call it first purchase acquisition.
As it stands, retention is so talked about because it’s the flip side of the acquisition coin, and paid acquisition is more expensive and harder than ever. Critically with the introduction of new iOS updates infusing turbulence into the space, the consumer is getting all the power back. Now that it’s so much harder to get consumers' attention, the real opportunity lies in retention.
After a consumer’s first purchase, it’s all about convenience. They know what they’re looking to buy, and they’re just looking for someone who can help them reorder on their own terms.
“Retention drivers span community, SMS, email, sampling, content, product catalogs, checkout flows, and distribution. More importantly, additional drivers are emerging every day as new platforms and channels unfold.”
Core Levers for Ramping Retention
According to Alex, the lever that most operators are sleeping on is the product catalog.
If a brand only sells one product, that’s not retention, it’s reordering. Put simply, the brand has nothing else to sell. To get people to discover more aspects of a brand, a customer needs options. Over time, customers just won’t buy the same product over and over again.
So, what makes a strong retention marketer? For Alex, it’s about having continual touch points with the customer. As a result, he points out that folks with a background in CX usually make great retention marketers. And if a brand is just starting to dabble in retention, the low-hanging fruit exists in the email world and content world. Hiring email marketers who can focus on the post-purchase experiences along the funnel is one of the fastest ways to see retention uptick.
“At the end of the day, customers just don’t buy from brands anymore. They buy from relationships with real people.”
Pushing Beyond The Subscription Model
When brands dive into tactics around increasing retention, their first thought turns to another subscription model, but there are so many other routes that teams need to consider. DTC brands shouldn’t ask themselves, “How can we get as many people into subscription as possible?”
Instead, they should ask, “How can we reduce one-time purchases?” If a brand is going to pay and do all the work to attract customers for the first time, they need to do everything they can to hit purchase number two, three, and four.
If a brand wants to consider using a subscription model, Alex suggests creating a matrix by mapping out order value and replenishment rate. At its core, subscription works best for products with low price points and high replenishment rates (less time in between purchases).
It’s also critical for teams to think about discovering and analyzing predictable consumption patterns across multiple cohorts. For example, people eat cereal every day, and more often than not, multiple people per household consume it. That use case is primed for subscription.
“The large majority of DTC brands push customers towards a subscription offering. However, subscription isn’t the only retention tool in the toolkit.”
The Repeat Formula to Success
While brands, especially those with replenishable products, aim to drive customers to subscription, not all customers want—or even need—a subscription.
Repeat is focused on helping brands serve these customers by building the “Buy Again” button for DTC.
Much like the way Amazon, Target and other major ecommerce retailers have made their account pages shoppable, Repeat gives brands the ability to deliver that experience to their customers, so they can easily reorder items they’ve previously purchased.
This type of experience, it turns out, is exactly what many customers look for: According to a survey done by Coefficient Capital and The New Consumer, 43% of consumers start their online grocery orders with their last order. In other words, the first place they go is to their order history.
While everyone wants to know their LTV, it’s only one metric and nearly every brand calculates it differently. Alex points out that the key unlocks are dashboarding, creating starting benchmarks, and tracking metrics on a per product level. The hardest part of LTV is the T, or time window.
When evaluating LTV, brands should ask themselves:
- What’s the customer’s LTV after their purchase in 90 days?
- Of the people who buy this product, what else are they buying?
- How valuable is the customer after they’ve been pushed to our site?
From a product perspective, variety or sample packs are the gateway to customer retention. If a customer doesn’t know what they want and decides to purchase a variety pack, brands can learn a lot from their second purchase. Diving deeper, they can look at which products in the pack have a higher LTV as well as the statistical probability of someone getting hooked.
In addition, if a bundle includes the brand’s hero product and other items that are typically replenished at a higher rate than most, the brand now has a valid reason derived from quantitative data to engage with their customer and remind them to purchase again.
“Retention is like going to the gym. When you look at yourself day to day, you probably won’t see much of a difference in muscle gain. But over an extended period of time, you’ll see just how much progress you’ve made.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
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33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
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