We haven't talked about retention (yet)

Customer retention

Customer retention is all the rage in the ecommerce world right now. The bloggers and podcasters… and now the ‘retention agencies’ (aka Klaviyo email agencies looking for clients that will make their life easy … because retention decisions are predominantly about the product, not the email… but I digress) and apps… I bet you never knew it existed before 2024?

I bought the domain retention.co.uk a few years ago for less than £1k. I was presenting my keynote, brilliantly entitled  ‘Your Retention Please’ (see what I did there?) countering the other speaker’s decks focused on Facebook Ads and growth hacks. So, it seemed a suitable domain. I've just turned down 5 figures for the domain. I guess retention is a big deal.

Retention has always been a big deal. It’s just rarely discussed for 3 reasons;

1. It’s difficult to view as it happens post-sale

2. It’s difficult to analyse because the data is all over the place.

3. Agencies rarely push retention as there are no direct costs (eg. ad spend) to justify against revenue earned.

Don’t make this mistake.

I was working with a brand that pushed 25% discount codes for first time purchases. Their business model was based on retention. Give a great post-purchase experience and a great product… folks will come back for more.

That should be the simple premise for a great retention strategy right?

This brand was struggling.

Nobody was coming back to make a purchase. Acquisition was working great… but they just couldn’t turn the dial on repeat business.

My job was to figure out why.

And the issue became clear pretty quickly.

Take a quick walk with me in your consumer shoes. You’re given a 25% discount code that is only available to first time purchasers. What do you do? Of course you do, you register with a different email address and use that code again.

Using that code with a different email address registers you as a brand new customer in Shopify.

Retention wasn’t the issue. Tracking retention was.

People were coming back in their droves to make a second purchase. It’s just that the data was telling them otherwise. And that’s because the data is reliant on the email address to track repeat business.

People were registering again and again using different email addresses. Their work address, their partners address… gmail addresses. We all have access to more than one email account.

Customers learned how to bypass the ‘first purchase only’ requirement. We all do it.

To understand the true retention rate we pulled the data into Excel and filtered by post code.

Now the challenge they face is how to retain customers without the margin-killing 25% discount code being used repeatedly.

Customers aren’t dumb.

My lesson here is not to get to caught up in the numbers. There are wonderful apps that give you a clear view of repeat business metrics, lifetimely.io being one I always work with. Let the data provide you a benchmark to work from. Then focus on the work. 

Now go forth and retain.