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The ‘One & Done’ Trap:

How only focusing efforts on acquiring new customers can undermine long-term retention & growth.

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Agenda

• What our customer data told us

• How those insights changed our focus for growth

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• How many of you are looking to grow your business this year?

• When you plan for growth, how many of you plan on primarily acquiring new customers?

• How many of you have a client type of business, where you know who your returning customers are?

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What the data told us…

$1,725

$445

$96 $55 $41 $27 $13 $6.80 $0.10 $0.002

1 2 3 4 5 6 7 8 9 10

Create deciles of your customer portfolio and rank order them from highest spenders to lowest. You can then typically see how the top 20% of your portfolio are responsible for the bulk of your business.

80% of our customers only contribute to 32%

Not all customers are created equal

Protect/Retain Up-sell/Cross-Sell/RFM Little/Nothing

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Life Time Value

Average Profit Generated Per Year

XNumber of Years (of average customer retention)

-The Cost to Acquire

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How breakeven instructs ad budget

Cost Per Acquisition = $150Breakeven = Month 16

*Please note you CAN improve ALL of these metrics.

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How did this change our focus?

Our growth strategy now includes focus on retention, upsell & cross-sell of our existing base

We used LTV & break-even calculations to improve ROI & make strategic decisions about which customers to make offers to & which to ‘rest’

We consider returning customer journeys in SEO/SEM activities and lengthened the timeframe customer onboarding

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Key Takeaways

• Know the value of your EXISTING customers: 1. Cost per Acquisition

2. Break-even point of Cost per Acquisition3. Most Valuable Customers

4. Life Time Value

• Do not ignore the importance of returning customers in SEO/SEM activities & ‘findability’

• Concentrate most of your efforts on your most profitable segment

Otherwise, you are a taking a ‘One & Done’ approach.

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Thank You!