In the last newsletter, I discussed some powerful solutions Klaviyo offers that can be used to optimize your retention marketing strategy.

Today, I want to discuss another tool that can offer even deeper insights into your email list and how it has been driving significant incremental revenue for many brands.

The tool I’ve been using is Segments*, and it’s perfect for advanced segmentation and enhancing customer lifetime values.

Let’s look at a few ways Segments can help add incremental revenue to your business:

How to Convert Customers into Subscribers

One of the biggest challenges for any brand selling consumables is the transition from one-time purchases to subscriptions.

This is a key moment in the customer journey as a one-time buyer can become a loyal, long-term subscription customer with a significantly higher lifetime value.

Retention marketing in the form of email and SMS flows can play a critical role, but the timing and product selection needs to be optimized to maximize the likelihood of conversion.

To create more subscribers from your customer base, focus on the following:

1. Determine the average time it takes for one-time customers to convert to subscribers

2. Determine how many customers repurchase the same product when transitioning to a subscription and how many prefer a different product

3. Determine how customers opt directly into a subscription and how many make a one-time purchase first

By creating these segments, you can then set up your flows with the proper timing, messaging, and product selection:

1. For example, if you find that most customers convert within 90 days, you can set up your email flow to target customers with subscription offers during this critical period.

2. For customers who repurchase the same product, emphasize the benefits of subscribing to their preferred product. For those who switch products, highlight the flexibility of your subscription service and the ease of changing products within their subscription.

3. For direct subscribers, focus on the benefits of the subscription right from the start, such as cost savings, convenience, and exclusive perks. For one-time purchasers, use educational content and testimonials to gradually introduce the idea of subscribing.

All of these segments and the data described above can be easily visualized using Segments.

Winning Back One-Time Customers

One of the biggest mistakes many brands make with their campaign strategy is blasting out the same campaign to their entire list.

Campaigns should be personalized based on where your subscribers are in their buying journey.

This means tailoring your messages based on products for the following segments:

1. Non-customers

2. One-time customers

3. Repeat customers

When you analyze your data, you’ll notice that 80% or more of your attributed email revenue comes from your repeat customers.

That’s why turning one-time customers into repeat buyers is a critical element of your email marketing strategy.

Reducing the one-time customer segment means your retention is improving.

With Segments, you can filter and identify churned one-time customers and separate them based on their product preferences.

By sending personalized product-specific campaigns, you can offer the right recommendations based on previous buying behavior and provide appropriate incentives for the second purchase.

Increasing Repeat Purchases

One of the primary goals of email and SMS marketing is to increase purchases from your existing subscribers.

To encourage repeat purchases, the following data is critical:

1. Which specific products are customers purchasing?

2. Are customers ordering the same products each time?

3. What is the average order value (AOV) for repeat purchases compared to initial purchases?

4. Are there any patterns or trends in the types of products that lead to higher repeat purchase rates?

5. What is the customer lifetime value (LTV) of those who make repeat purchases versus those who do not?

6. Which marketing campaigns or messages have been most effective in driving repeat purchases?

In Segments, you can take customer purchase data and put together a product cohort analysis while analyzing prior campaign performance by product to gain a clear understanding of what messaging worked best to convert new subscribers to paying customers and then repeat buyers.

Email Marketing Video of the Week

My goal is to start posting more retention marketing content consistently on YouTube going forward this summer.

I recently just released a new video on my channel that discusses opt-in rates and how to improve them.

Keep in mind that a high opt-in rate isn’t necessarily a good thing.

If many low quality subscribers are opting in but not purchasing, then you’ll just end up paying more to maintain a larger list while not seeing a proportional increase in revenue.

That’s why I share a tip in the video on how to make sure your subscribers are high quality with a high purchase intent.

Check it out, and let me know if there’s any particular content you’d like to see on the channel in the future.

I’ll be back with more retention analysis and Meta ads breakdowns for you next week.

Talk soon,

Sharad

@pmktg00

Next Steps

If you own or operate an e-commerce brand generating at least $1,000,000 in annual revenue, feel free to book a call with me to discuss how we can improve your ad creatives, landing pages, and email/SMS marketing strategy.

To further enhance your e-commerce and marketing skills, you may be interested in signing up for one of the options below:

1. Learn branded direct response copywriting and how to create high converting cold traffic funnels here.

2. Learn how to write advertorials here.

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