Today we’re going to create the strategy for a hypothetical 8-figure brand in consumer packaged goods (CPG) with declining sales in desperate need of improving their retention marketing strategy.
Here’s the 6-step framework I would implement to optimise Lifetime Value (LTV) and get this brand back on track.
1. Understand the hero product
If the product assortment is large then we need to quickly analyse which products drive the most conversions to build our strategy around.
Remove outliers and apply the 80:20 rule based on first purchases.
Once we’ve removed any outliers, it’s time to double down our efforts by focusing all ad creatives and product positioning around what is fundamental to our business.
2. Benchmark repeat purchase rates
Look at 30/60/90 day windows to set a benchmark on the current customer journey.
Analyse the LTV increase within these periods too (we want to get it to 30%+ minimum in that timeframe).
This sets a baseline for what we’re targeting to improve and measure the incrementally of each approach.
3. Analyse the median time between orders for repeat purchases
We need to understand at which point in the customer journey we should be delivering information about:
> Product Education
> Habit formation/challenges
> UGC collection
> Reviews
> Upsell/cross-sell/replenishment offers
Let’s break down how we would approach each of these with examples from brands we’ve worked with.
1: Product Education
Our goal with these emails are simple: drive adoption by ensuring customers are educated about the product to extract maximum value.
2: Habit Formation Challenges
This is one of my favourite ways to gamify the post-purchase experience.
Set your customers a challenge and hold them accountable to the reasons they purchased your product.
A great example of this was when we worked with Waterdrop, they had the “Drink More Water” challenge they enrolled new customers in.
Tailor it according to your brand/niche.
3: UGC collection (Review Request)
This one is self-explanatory: any review request we’re able to source at this stage of the customer journey has the dual effect of encouraging repeat purchases while simultaneously generating more social media assets for the brand.
4: Upsell & Replenishment Offers
A lot of LTV is realised in the customers first order. The lesson? Strike while the iron is hot and they’re “in the market” to purchase.
Here’s a few examples of upsell offers you can include to increase the LTV from somebody’s first order using bounce-back emails:
The next opportunity we need to look for are emails that drive replenishment if the product is consumable by nature.
You’ll want to extract the data that shows you the median time between 1st to 2nd purchase in order to time your reminders accordingly, and integrate this with common sense based on the projected lifetime of the product (i.e. if it’s 30 servings, go in around day 25 to attempt to drive the second sale).
4. If the repeat purchase rate is "low", conduct qualitative research
Implement a Jobs To Be Done (JTBD) framework to find out why customers aren't receiving value from the products.
You can automate this data collection in the post-purchase flow by implementing qualitative research.
5. Use answers from the interviews/surveys to improve customer journey
Use the findings to improve any gaps in the product formulation or customer experience.
This will take some time of course, but you can’t realistically improve the repurchase rate without taking serious action upon these findings.
If the product is weak, reformulate accordingly.
If the acquisition messaging is off, realign it to appeal to the right audience.
6. Push all customers on this journey
Align everything from product to market positioning and ads to attract the highest LTV customers.
Relentlessly serve them with the best content and media assets to ensure they extract the most value out of the product.
Disproportionately invest in customer experience for this group of customers to amplify Word of Mouth to drive referrals and social proof.
Takeaway
This strategy is about finding your best customers (ICP), aligning your messaging to attract more of them, and then strategically using email to uncover any gaps in your product or customer experience.
Once this has been achieved, LTV and repurchase rates improve as a byproduct of a better brand experience.
further in depth reading
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