Hope you are having a great weekend. I don't write about retention a lot, so let's change it up and do so today. I find it a bit boring for some reason; but it's of course extremely important. Before we get going, I want to thank today's partner of the week Minisocial. The OG content platform used by brands like Native, Magic Spoon, Topicals, and Super Coffee. Have you ever wondered how companies like Native, Super Coffe, and Topicals always have fresh creator-made content ready to run in their ads, website, and emails? It’s not because they have an extensive seeding program they run internally… they use minisocial to get it all done. I’ve spoken about minisocial before and will continue to highlight them because they don't have long-term committmens, you can get rights to run the content anywhere you want, Minisocial books creators for you, pricing is totally fair, and you get the creators to post it at no additional cost. If you’re in need of content, I’d recommend setting up a call with minisocial to see if they can be a good fit for you.
There are a few things that I think are really important when it comes to a retention marketing program that don't get done or at least talked about enough:
Retention Is More Than Email and SMS
Not sure how, but for some reason retention became synonymous with email and sms in our world. There is so much more to a great retention program than email and sms. I'll admit they are a big part of it and will be the primary retention channels. But there are a lot of other ways to impact retention outside of those channels, so don't silo it to just those channels.
Counterintuitive Data
There are a few counterintuitive data points that I have seen most brands have. The first is you are most likely to get a second purchase from a new customer within the first 30 days than over any other length of time. Second, they are more likely to re-purchase the same product versus buying a different product on their second order. These sound weird to many marketers; but they're pretty consistent across brands, especially in the consumable space. But it extends beyond it. I bought a pair of shorts I love about three weeks ago in Navy. They fit perfectly, are versatile, and thus they're the only shorts I want to wear right now. This week I was near their store and I bought two more pairs; in Green and Gray. I've done this with t-shirts and sweaters. I'm probably not the typical buyer; but I think a lot of retention marketers would have tried to wait until I had more time to wear them, and then likely built out a flow to upsell me into different categories or products. Check your brand's data, but I bet you will find the same. Use this information as you wish to create timely and relevant post-purchase flows.
Measure Properly
I don't find that retention marketing gets the same level of scrutiny as acquisition efforts do because the spends are so much lower. What I mean by that is everyone is talking about incrementality and using tools like Haus now for acquisition efforts which I love. But so many retention marketers don't measure incrementality from their efforts, and they should. I think this is always important, even with email flows because it takes a ton of time and bandwidth to test and set up, and there is a cost to that. But once you add anything that can affect margin like free shipping, discounts, or sms and direct mail you need to not only take incrementality into consideration but also measure incremental contribution margin. It takes some time, but it's really what you are trying to influencer so it's what should be measured. I would never let a retention marketer on my team report on platform reports "ROI" especially if it contains views in it. Incremental contribution margin is what you are after.
Loyalty Programs Are Not Worth It
To this date, I still am yet to see someone provide me results of the incrementality of a loyalty program for a DTC brand. I would be very careful of implementing one for your brand. If you are considering it, you should make sure you have picked all of the lower hanging fruit before you try a loyalty program. And if you do go ahead with one, make sure you measure it properly by holding out a small portion of the audience.
Product Is Supreme
What people are buying and how they use it is far more important than any emails you send. If you are selling a mattress, people aren't going to buy a second one right away no matter how good your emails are. If you sell multiple SKUs, you should analysize retention by which product they purchase to see if you find anything interesting. What we find is our highest LTV customers have the highest AOV on first purchase; purchase a few SKUs more than others, and purchase from more categories. We then create segments for potential high LTV customers and do more significant marketing to these segments.