Not every customer is equal. Not every sale is a good sale. Are you attracting “once and done” or “retention ready” customers for your CPG/DTC brand? The “retention ready” acquisition strategy pays off in dividends as reoccurring revenue becomes a larger piece of the total revenue.
How do you attract “retention ready” customers? A common theme I see across successful brands is that they focus on a strong brand story that conveys the brand’s values that align so well with their core customer.
They then constantly iterate and refine it as unfortunately, what worked two years ago with messaging may not work today.
By focusing on a tighter niche and developing highly targeted messaging, the brands that are scaling profitably attract the right “retention ready” customers who are far more valuable than a “once and done” customer who may buy on a deep discount and never return.
Bottom line?
High-performing companies are healthy companies. If you spend $80 acquiring a new customer and that customer only buys $80 of product and never returns, the business is not scalable. Monitoring customer lifetime value by cohort is crucial to identify and refining how you attract the most valuable customers and spot trends in their engagement patterns.
Track the data. How many of your customers bought on discount, and how many returned? While the revenue growth may feel great, the long-term result may not be what you expect.
Do you have systems in place to track this data?
