In the meantime, read this article to learn how CartHook post-purchase offers can help your store.
Congrats! You followed this great advice from the pros, and your store had a stellar BFCM. Conversion rates were up. Your AOV was higher than you expected, because you were smart and you offered your customers post-purchase offers with CartHook. And thanks to your thoughtful messaging and smart ad spending, you saw lots of new traffic. Hello, new customers!
Wait, have you thought about what that last sentence means for your brand? The fact that you have new customers should spark a to-do list of creative ways to retain them, now and in the new year.
Even though retention isn't typically the first thing ecommerce merchants think about after BFCM (we'll get into more of why that is later), it's the key to your long-term success as a brand. If you're not yet convinced of that fact, we'd like to introduce you to Kristen LaFrance, head of growth and community at Churn Buster. She's a master when it comes to helping brands improve retention, and she spoke with us about how you can nurture every one of your new BFCM customers.
KL: One of the biggest hurdles merchants face with improving retention and extending lifetime value (LTV) is a lack of data. Until you have a large enough base of customers, it's nearly impossible to focus on LTV. This is what makes BFCM such an opportune moment for brands heading into the new year. Merchants suddenly have what they've been missing: data. And a lot of it.
Now's the time to implement all the retention efforts you can to get a deep understanding of your recurring customers and LTV potentials.
First, look at your acquisition channels from the weekend. Which channels brought in the most customers? Take it a step further. Look at which channels brought in the BEST customers? Right now, you're probably looking at the customers with the highest AOV over the weekend as your "best."
But as the season rolls on, you'll want to also look at repeat purchases as a signal of your "best" customers. These insights will show you which channels are most likely to bring in the most loyal and easy-to-retain customers.
Additionally, you can segment your brand new BFCM customers by product type to determine your most popular products over the high-volume weekend (which can open insights into the deeper motivations/interests these customers have). Look at each product cohort (as well as popular product combinations) and see if you can spot trends in the demographics AND psychographics of the customers.
Then you can compare these analyses against each other (and other data) for an even deeper understanding. Did one channel drive a certain SKU to be purchased more than the others? Why was that? Did you run a certain ad on Facebook? Was it a particular email in a campaign? Did one social post bring in more conversions than the other on a certain SKU?
KL: Now you can start to use the data to plot customer journeys and reverse-engineer campaigns around them.
For example, we now know that an Instagram ad with X style and X imagery brought the most purchases for product Y. Or, email X revolved around X messaging and converted to the highest AOV of the weekend.
That's a lot of Xs and Ys, so let me explain what this looks like in the real world.
Ancient Nutrition does this really, really well. Their marketing team aggregates data to identify the products and promotions that lead to the longest subscription lifecycles and highest LTVs.
I interviewed Jeff Schnepple, Director of Marketing Technology at Ancient Nutrition, and he explained this process.
"When we did this promotion, and that cohort of customers that came in, [we're looking at] what does their lifetime value end up being for certain products? And then as well as: How many cycles, how many intervals of the subscription until they churn? So we try to narrow that down. And we are working towards ways to either extend those subscription cycles, or head it off when they're most likely to churn."
In practice, Ancient Nutrition was able to use this mindset and data to determine which of their "gift with purchase" promotions led to the highest LTVs.
To do this, the team compared three different gift campaigns: A frother, multi collagen stick packs, and essential oil.
After aggregating and analyzing the data, this is what they found:
"We're able to segment those cohorts of customers and see: How many life cycles have they stayed on for? What was their average order value when they came on? And of those three, interestingly enough, and honestly quite face palming-ly simple of an answer, the frother by far and away—almost 50% higher LTV on the frother gift with a purchase than any of the others."
By plotting promotions with a retention metric in mind, Ancient Nutrition was able to map out potential customer journeys, then create campaigns that are nearly guaranteed to return a positive ROI.
Now, it's easy to see how all of this can run you down a rabbit hole, so start by figuring out what you actually want to learn. What's the most valuable information you can gather? What is your golden metric of success? What customer journey is most profitable for your business in the long-run?
Most importantly: which customer stories can you reverse engineer for new campaigns?
KL: Merchants should be sending authentic requests for feedback, and if you're not wanting that kind of real feedback, you might pause and take a hard look at what you're doing.
From direct emails to social posts, community forums, and even SMS (or, gasp, hop on the phone), start asking these customers how they're doing and how they're feeling about the products. The key here is to keep it human. One-to-one conversations are vital to gaining customer trust.
The backbone of all of this is the desire to get to know these customers. It can be tempting to look at your BFCM win, wipe your hands off, celebrate, and move on to the next sale or campaign.
KL: First up, respect. I see a lot of brands going wrong in this zone. (Check out my recent Tweet thread on this topic.)
Your first goal should be to earn the respect of these new customers. You do this by standing out from the crowd of holiday sales. This doesn't mean you have to shut off all sales, but make sure you are also welcoming these new customers into your community and/or loyalty program, offering them exclusives (if feasible), and starting to build a relationship with them.
It's about going deeper than the sale as quickly as possible. You need to build brand affinity and connection ASAP. Every other brand is waiting until the holiday season is over to do this. Be one step ahead and truly invest in this new cohort of customers.
KL: This is a whole thing and a really interesting question, and one I covered in depth in this post. In the battle between retention and acquisition, merchants almost always choose to focus on the latter.
Here are the top three reasons:
1: Acquisition comes first. No matter what, you can't retain a customer you don't have. So you have to focus on acquisition first. And until you have a large enough cohort of customers and data, it's nearly impossible to shift any resources to the other side of the funnel. THIS is why it's so important to use your peak buying cohorts (aka BFCM) to start testing strategies.
2: Retention is hard to track. What's the north star metric? How is LTV measured? Do you use predictive algorithms or historical data? And what's the time frame?
3: These are hard questions to answer because churn really is an aggregate response to your business. We know that everything from product quality to email content can impact retention, so it's hard to nail down your data. And we love data.
Furthermore, ecommerce platforms don't report much on LTV.
1: Retention isn't quick or sexy. This is arguably the thing that prevents merchants from focusing on long-term relationships. It's the same reason people date and don't settle down. Acquisition is more fun, sexy, and celebrated. Especially if you're VC backed.
2: Even worse, it requires waiting. The most impactful retention strategies have long feedback loops. Merchants have to wait weeks even MONTHS to measure the impact of those strategies.
KL: Outdoor Voices' repeat purchase rate is incredible. There's a lot that goes into their retention, but it boils down to a few key areas: vision/values, community and engagement (both online and offline), and product. Read more about it here.
MeUndies' launch of their membership model highlights an important shift in ecommerce. Customer relationships (and ultimately retention) is where brands must focus to win.
When a customer opts-in for the MeUndies subscription, they are actually opting into so much more than a monthly delivery. With the membership model, subscription customers get a new level of exclusivity and value from MeUndies. Members pay a cheaper price site-wide, get first access to new products, and get exclusive prints just for members.
According to Jonathan Shokrian, founder of MeUndies, members account for half of MeUndies customers, and they spend three times as much overall as non-members.
The key here is the relationships being built with members. They're not just selling underwear, they're sharing a journey with their members. They've brought them into the brand, made them feel special, seen, and heard.
Here's my podcast episode with their VP of customer experience on why they made this shift!
BarkBox is incredible at retention because of their deep understanding of the customer. BarkBox knows their customers down to their core and even recognizes that the humans ordering the boxes may not actually be the end customer.
The company is full of people JUST like their customers, overly obsessed with their dogs. You can feel this in every vein of the company. From how they market to their support language, everything is built on this mutual story/love.
Just look at how their social team responded to a story I tagged them in on Instagram:
This clearly isn't a one-way relationship. BarkBox goes out of their way to stay authentically engaged with their customers. The dedication is unmatched, which is how they were able to build a raving base of FANS that drive a ridiculously loyal community.
Even though it's tempting to sit back and keep popping corks until January 1, now's the time to start nurturing long-term relationships with your new BFCM customers.
Study them, get to know them, then welcome them into your community. That way you'll keep 'em coming back well into the new year!
