Repurchase Rate Should Be Your True North Star, With Brandon Amoroso, Founder at Electriq and Co-Founder at SCALIS
Founders and marketers are constantly bombarded with an array of metrics that claim to be the ultimate barometer for success. Conversion rates, average order value, cart abandonment rates – the list goes on. But if you ask Brandon Amoroso, Founder of Electriq, Co-Founder of SCALIS, there's one metric that rises above the rest, one that's the true north star of your business's longevity and health: the repurchase rate.
Brandon recently joined us on our latest episode of Magnetic to discuss why studying your repurchase rate is crucial and how, by focusing on it, you can build a brand with staying power. And here's a kicker – it's not just about measuring; it's about taking action, specifically hiring a Head of Retention.
Before we dive in, be sure to check out the full episode here:
Understanding Repurchase Rate and its Impact
Imagine you've got a bucket – your business – and your goal is to keep it full of water – your customers. Every first purchase is like a new stream of water flowing in, but what happens if there are holes in the bucket? That's where the repurchase rate comes in. It measures the rate at which customers come back for a second purchase, and it's pivotal because getting customers to return is like plugging those holes.
Here's the thing, your first purchase is like your first date. It's a trial. The second purchase? Now, that's the beginning of a relationship. And relationships are where the real magic happens. They're less about grand gestures and more about consistency and reliability. This is where the repurchase rate shines – it tells you if you're building a fling or a long-term relationship with your customers.
The Drop-off Cliff and How to Avoid It
It's no secret that there's a significant drop-off after the first purchase. The eCommerce world is brutal; customers have more choices than ever before. If you don't make a memorable impression, they'll move on. This is why Brandon suggests pouring resources into that second purchase experience. Surprise your customers, delight them, give them a reason to come back. It could be a personalized note, a small gift, or a special offer – anything that shows you value them.
Hire a “Head of Retention”
You wouldn't expect one employee to be your accountant, marketer, and salesperson, would you? So why expect someone to handle both acquisition and retention? They're two different beasts. Acquisition is about the chase, the excitement of the new. Retention is about building a home, a place where customers want to stay.
Enter the Head of Retention – your brand's champion in understanding customer needs, crafting strategies to keep them engaged, and turning first-time buyers into loyal fans. This role is about getting down in the trenches, analyzing data, reaching out for feedback, and using that information to make your customers' experiences unforgettable.
Why Retention is the New Acquisition
Over the last year especially, the cost of acquiring new customers has skyrocketed. Meanwhile, the value of keeping existing ones has become more apparent. A high repurchase rate signals a healthy business, one that doesn't just attract customers but keeps them.
The Head of Retention's mission is to ensure that once your acquisition team has done the hard work of bringing customers in, you're not letting them slip away due to neglect. They make sure your bucket stays full, that your business becomes a part of your customers' lives, not just a one-time stop.
Tactics for Retention
Here are some strategies that can help you enhance repurchase rates:
Personalized Post-Purchase Communication:
Customize transactional messages to hint at the exclusive benefits and surprises awaiting customers in their second order.
Surprise and Delight:
Don’t be afraid to send unexpected gifts or offers to first-time buyers. This gesture can transform a one-time purchase into a lasting relationship.
Customer Discovery Interviews:
Regularly engage with customers through interviews. This qualitative data can be as valuable as quantitative analytics, revealing insights that numbers alone cannot.
Segmented Email Campaigns:
Tailor your email marketing to target one-time buyers with personalized content that resonates with their initial purchase, encouraging a follow-up order.
Develop a compelling loyalty program that incentivizes repeat purchases. Make earning and redeeming points simple, fun, and rewarding.
Consider introducing a subscription model for your bestsellers, ensuring a steady repurchase rate and predictable revenue stream.
Implement feedback mechanisms post-purchase to gather insights and make immediate improvements, showing customers you value and act on their opinions.
Building for the Long Haul
As an eCommerce founder or marketer, your aim should be to build a brand that lasts, not just survives. And for that, your repurchase rate needs to be more than a metric – it needs to be a mindset. Every decision, every strategy, every product launch should be filtered through the lens of customer retention.
The Head of Retention is the embodiment of that mindset, someone who wakes up every day thinking about how to make your customers come back. They're your brand's best friend, the guardian of your customer relationships, and the architect of experiences that turn casual buyers into lifelong patrons.
So, to all the eCommerce founders and marketers out there, if you're not already obsessing over your repurchase rate, it's time to start. And if you don't have someone solely dedicated to retaining your customers, it's time to hire. The Head of Retention isn't a luxury – it's a necessity for any brand that's serious about growth and longevity.
Remember, it's not just about who comes to the party; it's about who stays until the end. Make sure your brand is hosting the kind of party that no one wants to leave. That's how you build a brand that doesn't just survive the test of time but thrives through it.