#37 - Increasing LTV Through Email (?)

Short answer:
Yes.

Long answer:
It’s more of a function of your product as well as the need/want it solves.

Email agencies who proudly tout that email singlehandedly raise LTV by 30% aren’t telling you the full story.

Yes. It’s still incremental revenue, and yes, you can influence repeat purchases, but only to a certain extent.

And I’ll be talking about how we can influence these repeat purchases through email, let’s get started.

What Should We Look At?

Enter Cohort Analysis:

Repeat Purchase Rate (Month 0)

If we take a look at the brand above, you’ll notice that the likelihood of a repeat purchase is highest in month zero (ie. when product is purchased).

This means that you’ll have to dial in your New Customer Nurture flow (NCN) - whether that means hitting them with more social proof, upsells, discounts.etc

So often we come across brands that are worried about being ‘annoying’, along with ideas of ‘who’s going to buy immediately after their first purchase’ (ignore your feelings and look at the data).

Return Rate (Q3 vs Q1)

The next thing you’ll realized is that customers who purchased in Q3 have a higher likelihood of returning vs customers who purchased in Q1 (1.1 , 80.5 /
1.1, 107.4 / 0.9 , 71.5 vs 1.5 ,104.7 / 0.6 , 60.7 / 0.4 , 37.9).

So what we can do here is to allocate even more of our Q1 budget into Q3, to get ‘better quality’ customers who respond better to our email campaigns to raise LTV.

Win-back Flow

Finally, you’ll notice that the biggest fall off happens in months 3/4.

The likelihood of purchase drops drastically after, and this is where you typically place your ‘one final big discount’ to reactivate the customers before you lose them for good.

Putting some example win-back flows below for your reference, but some key points to note:

a) You want to use a subject line that screams for attention (make it obvious it’s their last chance to engage)
b) Talk about the lack of engagement recently
c) A larger discount to get them to return

And that’s a wrap!

Hope this has been helpful, and have a great weekend ahead :)