- ERIKHOLLEMAN
- Posts
- E-Commerce Reboot: Final Track - Revenue (6/8)
Hi there! 👋
Retention is key. Acquisition is costly. Fix retention first.
Most ecommerce brands struggle. 80% of buyers only purchase once. Just 20% repeat.
Here's the problem: One-time buyers aren't profitable. CAC is too high, and one purchase doesn't cover costs.
So, how do you engineer a second purchase?
Start with recency. Here's a step-by-step guide:
1️⃣ Analyze repeat customers.
2️⃣ Determine the average time between their first and second purchase—"intra-purchase latency."
If 80% repeat within 30 days, this is your Magic Recency Number.
This insight tells you two things:
Buyers within 30 days (R<30) are still likely to buy again.
Buyers beyond 30 days (R>30) are unlikely to return.
Now, use these strategies:
💰 For R<30 days Market more products at full margin. Show related items. Automate this in your email/SMS/direct mail.
💰 For R>30 days After 30 days, push promotions. Use a discount ladder. Automate this in your email/SMS/direct mail.
By focusing on this recency tripwire and converting 1x to 2x buyers, you maximize ROI. Automate it in your CRM and spend your time on other growth channels.
Stay tuned, have a great Sunday!
Erik
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