The Hill I Will Die On

Hello Hi Hey,?

January is gone; that was quick.

Before joining Yotpo, I spent most of my time on the brand side, recently at a super fast-growing 9-figure makeup brand.

In my (little) free time, I've consulted with nearly 100 brands in our DTC circle on both Customer Experience and Customer Retention.

Trust me, I've seen things. ??

Someone recently asked me to distill all my learnings into three bullet points. Here they are:

• Retention has become a much bigger focus in recent years. Sustainable growth is more important than just growth.?
• Many lack a well-thought-out retention strategy. Most just want “more revenue from existing customers” but have no real plan to get there.
• Too much energy is wasted on trying to change things you can’t, while not enough is focused on the things you easily can.

This third point has been on my mind for months, and I'm about to dive deep into it.?

Join me. Let’s chat.

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The Unchangeables - A Hard Look at What's Out of Our Hands

Let’s talk about the stuff in Customer Retention that's as unchangeable as my stance on adding raisins to cookies (just why?).?

Here are four biggies we probably can't tweak, no matter how hard we try.

1. Customer Bank Balance: Wish We Could Change, But No.?

News flash: We can't magically fatten our customers' wallets, and let's be real, most of us aren't sitting on a Scrooge McDuck pile of gold either.?

Whether they're splurging or pinching pennies, that's their business. Our job? To work with what they're willing to spend, not daydream about what they could.?

Their bank balance won’t magically hit the top tier just because you sent 900 emails.?

We’d rather find the potential high-LTV folks early on and send them increased targeted messages. More on that later.?

2. Personal Preferences: You Can't Please Everyone (And That's Okay)

Not every customer will love every product, and pushing them to buy large bundles or items outside of a category they are interested in probably won’t work if they dislike the category or don’t have a need for it.?

We've got to accept that we can't be the perfect match for every single person out there. And that's totally fine. You’re much better off understanding what they might like based on the data you have on them or what they have purchased in the past.?

3. Market Trends: Not Our Circus, Not Our Monkeys

Market trends? More like market rollercoasters. They go up and down, and trying to control them is messy and pretty much impossible.?

Our role isn't to dictate these trends; it's to hop on at the right time and enjoy the ride.

4. Competitors' Moves: It's Their Party, Not Ours

Lastly, whatever our competitors are up to, that's on them. It's like peeking into someone else's garden and getting jealous of their flowers. Sure, keep an eye on them, but obsessing over their every move is a game no one wins.

I have seen this in both the OLIPOP and Jones Road Beauty worlds. We had a ton of (really solid) competitors, and consistently tracking them was ok. Obsessing? Not so much.?

Focus on our garden; it's got plenty of potential.

The Changeables - Our Playbook for Impact

Let's shift gears from the unchangeables to the exciting part–what we can influence.?

Here’s where our strategies and actions can really make an actual difference in customer retention.?

1. Crafting the Customer Journey: The Early Bird Catches the Whale

Let's start with understanding the customer journey. By analyzing the paths of your top, say, 10% highest LTV customers, we can identify patterns and behaviors that signal a potential 'whale' before they actually hit those LTV numbers. ?

For instance, customers purchasing from multiple categories on their first order might indicate a higher likelihood of increased future spending. Spot these early signs, and we can tailor our approach to fast-track their engagement. (I'm still cooking on this, but I think Yotpo’s retention platform and Tailor has a firm leg up here.)

2. Pre-Purchase Quizzes: A Deeper Understanding

Pre-purchase quizzes are like having a conversation with customers before they even buy. It’s a way to get to know them, their preferences, and their needs.

Platforms like OctaneAI are great for this. They help gather valuable insights early in the customer journey, enabling us to personalize their experience from the get-go.

3. First Impressions: Setting the Right Tone

The initial interaction with our brand can be a make-or-break moment. It's about putting our best foot forward at every step of the journey.?

From the moment a customer lands on our website to how we communicate, everything shapes their perception of our brand. It’s something that is firmly in our control.

4. The Post-Purchase Experience: Beyond the Transaction

After a purchase is made, our job isn't over; it's just getting started.?

This phase is crucial for transforming a one-time buyer into a loyal fan. Here is where exceeding expectations and creating a memorable experience do a ton to help encourage them to return for a second purchase.

The problem is that most of us are already so focused on getting the next order that we fail to focus on making sure the post-purchase experience of the first one lived up to the expectations we set.

Last thing I’ll say before I climb down this hill: In the last few years, I’ve spoken to a slew of founders who had visionary retention goals, but there were a handful that crossed from visionary to dreamland.

Depending on your category and benchmarks, it might be highly reasonable to aim for a 40-50% repeat purchase rate, but when your goal is “every single customer will repurchase,” you end up spinning wheels and spending resources on things you can’t control.

Focus on the things you can control.

Now, put that on my tombstone. ???

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 ??