Not every brand needs to work on retention.
Some need it more than the rest.
As a brand, you should know your marketing strategy focus
Is it acquisition focus or retention focus?
You can build a $10M+ brand on the back of one-time buyers.
Also, build a $10M+ brand in a small community of 1000s customers.
Most brands claim to have this understanding, but it doesn’t reflect in their strategy.
If you are a pet food store and do not have an 80% retention rate, it’s a cause for worry.
If you are a furniture store and do not have 80% new visitors coming each month, it’s cause for worry.
Here’s the breakup of retention focus vs retention focus
How can you be sure you are on the right path?
To solve the right marketing mix, monitor 3 buckets –
- New customers from paid acquisition
- New customers from cheap acquisition (organic, referral)
- Purchase from existing customers
Then target the right mix for the customer buckets –
- To Be Retention Focus – 20% + 20% + 60%
- To Be Acquisition Focus – 40% + 40% + 20%
% is just for reference, but the marketing strategy focus should be visible in monthly numbers.
Most brands know the purchase frequency of their products, but it isn’t reflected in their marketing budget.
To scale, you need to find the right marketing mix.
