Email doesn’t equal retention
It's a tool, not a solution
Hi there,
At DTC Live London one of the panellists said “email doesn’t equal retention”. It felt like a powerful reminder of something I’ve seen happen to often before.
When retention is poor, D2C startups tend to jump straight to email. They pimp up their post-purchase flows, add a few win-back emails and sit back hoping for the best.
They see it as a solution to the problem.
I’ve seen DTC brands with world-class email flows and spot-on campaigns… but retention is still poor.
Because email isn’t a solution, it’s a tool.
You need to look deeper at what is actually causing the retention issue.
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Your step-by-step retention quick guide
The first thing I do is check for Product-Market Fit: do we have Product-Market Fit, and if yes, with whom. Signs of low Product-Market Fit (beyond retention rates) are: low level of customers are leaving reviews, low rate of word of mouth and low open rates on emails.
If we do, I then look at where the drop-off is: is it in the first phase or after a long-while? This helps distinguish an activation issue from a retention issue.
I then will try to understand what else could be impacting retention. I spend a lot of time talking to customer care and ideally customers.
What are the most common actual causes I see impacting customer retention?
Product-Market Fit issues - You think your product is great but customers are having regular issues. This is where an ongoing feedback loop, e.g. asking standardly for their NPS, comes in handy
Steep discounting upfront - Leading to acquiring bargain hunter customers, a good way to check this is to compare retention of discounted vs non-discounted customers
Not the right initial offering - Leading to customers testing your product for too short a period or not experiencing the full options to find the right one for them
Focusing on too broad a customer range - Rather than zooming in on the customers who love your product and for whom it solves an actual pain point
In which case email may be a solution to support it, but the time could just as well be spent on something else: customer care, product development, etc.
So yes, email can help customers stay engaged with your brand. But so can SMS or Direct Messages.
But if the value of the product isn’t getting across to them, or if they’re not truly your target audience, it won’t make much of a difference to retention.
If you want to make big steps with retention you need to get to the root cause of it, vs making surface level changes.
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Recommendation
For today’s recommendation I’ve chosen a brilliant book, The Power of Moments by Chip Heath and Dan Heath.
The Heaths identify that as human beings, our most positive moments are dominated by elevation, insight, pride, and connection. Through embracing moments like these, we can create more moments that matter.
How does this relate to retention? We need to create magic moments for our customers in our products, and reduce the time to magic moments, to ensure they stay on board for longer.
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When I originally posted about this on Linkedin, Chris Watson-Shaw (who I have never met but very much appreciate taking the time to comment) said:
“Still amazing how people love to cling onto email as a silver bullet. It’s very easy to use marketing tools as a way to deflect from fundamental issues with products. And then the email team gets hammered to do 1001 things because no one actually knows how to communicate with customers directly.”
The perfect TLDR of this email ^.
Till next week,
Daphne