The Most Profitable Businesses Have One Thing in Common: Retention
They don’t just attract customers, they keep them. Yes, they use paid ads to get the engine going (new customers), but what really fuels profitability is retention. Their customers come back, again and again.
They offer great products, smooth buying experiences, and ongoing value after the first sale through thoughtful marketing that encourages repeat purchases and reminds the existence of the brand
The Trap of Acquisition Addiction
Many brands fall into a dangerous pattern: constantly chasing new customers.
They pour money into Google and Facebook ads, while retention gets reduced to a couple of monthly newsletters with no real strategy, goals, experiments, or measurement beyond open rates and CTRs.
The result? Poor ROAS. Fragile growth. High customer acquisition costs that don’t pay off.
This Guide Covers the Basics of Retention
From measurement to action.
1. How to Measure Retention
You need to look at retention on two levels:
Short-term: Are your existing customers generating enough revenue month to month?
Long-term: Are you increasing the lifetime value of your customers over time?
These are two different challenges — and require different actions.
1.1 Measuring Retention in the Short Term
The key metric: Revenue from returning customers.
To track this, clearly define what counts as a returning customer (e.g., same email or customer ID). Then split the total revenue into two buckets:
New customers vs. Returning customers.
Formula reminder:
Returning Revenue = AOV × Number of Returning Orders
This lets you pinpoint whether changes are driven by order value or frequency.
Benchmarks That Matter
1. Time-Based Comparison
Compare this month’s returning revenue to last month or last year. Easy to do, but beware your email base should be growing, so year-over-year growth might not reflect improved retention.
2. Revenue Percentage Target
Multiply your monthly revenue target by the average percentage of returning revenue from the last 3 months. Simple, but doesn't account for seasonal shifts or customer behavior changes.
3. Cohort-Based Reorder Targets
This is the gold standard. Use historical reorder rates to forecast cohort behavior, adjust for seasonality, and translate that into revenue targets. Yes, it’s more complex, but it's fully automated in Kickbite dashboards.
1.2 Measuring Retention in the Long Term
Short-term metrics mix loyal customers with brand-new ones — blurring your true retention progress. To get clarity, you need cohort-based CLTV analysis.
Key Definitions:
Cohort Group: Customers acquired in the same month.
Reorder Rate Window: Time allowed for them to place another order.
CLTV: Total revenue per customer in that window.
Reorder Rate: % of customers who placed another order.
Likelihood: Probability of placing the next order.
Drop-off: % of customers who stop after each order.
2. Using Kickbite’s Retention Dashboards
Filters
Start by selecting your cohort group (e.g., Black Friday customers) and the reorder rate window (default: 12 months).
Example: If you're analyzing the January 2023 cohort with a 12-month window, you'll track reorders until January 2024.
CLTV View
This shows how much your average customer is worth. Use it to track trends — is CLTV going up or down? Is it driven by AOV or by order frequency?
Reorder Rates
See how each cohort performs against your reorder goals (e.g., % who made a second purchase). Use this to measure whether your retention tactics are working.
📌 Tip: Incomplete cohorts (not enough time to repurchase) are shown with dotted lines or light orange tables don’t compare them unfairly.
Likelihood & Drop-Off Analysis
Track where customers fall off:
After the first order?
After the second?
After the third?
Use this to zero in on your biggest retention leak. That’s where you focus.
Also, check the average days between orders. This helps you time email campaigns more effectively when customers are most likely to buy again.
How to Read the Dashboard (Recommended Flow):
Start with CLTV trends. Is it rising or falling?
Adjust the reorder window to test different views: 24, 12, 6, or 3 months.
Determine the driver: Is CLTV driven by order value or frequency?
Check Reorder Rate for Order #2. Is it improving over time?
Jump to Likelihood Block. Where’s the biggest drop-off?
Use avg. days between orders to time your CRM campaigns better.
The Golden Rule of Retention
Increase AOV on the first order.
Improve the reorder rate on the second.
Master that combo and long-term profitability is yours.
3. Factors Influencing the CLTV
➡️Improve Product Experience and Provide Clear Usage Instructions
➡️Reach Out to All Customers, Not Just Those with Double Opt-ins
➡️Promote Products with High Lifetime Value, Not Just Low Acquisition Cost
➡️Allocate the Marketing Budget to Channels and Campaigns that Attract Valuable Customers
➡️Use Multiple Retention Channels Beyond Email (WhatsApp or traditional mail)
➡️Your Email List is Gold
4. Basic Email Flows
With this foundation, you'll already have a strong starting point. This will lead to improvements in reorder rates, which can be further improved through iterations and experiments.
Welcome Flows
Objective: Explain product usage, build credibility, build awareness, and build fans.
When creating content for your welcome flows, it's important to have a clear goal in mind. While increased sales may be the long-term objective, if the customer has recently made a purchase, consider the welcome series as more of a gradual process. Focus on quick-win goals, such as increasing followers or driving website visits to educational content that supports customer activation in the early stages.
For new customers:
Email 1 - How to use the product → Goal: Website visits
Email 2 - Join our community → Goal: Social followers
Email 3 - Why [Brand]? → Goal: Read rate, brand building
Email 4 - Leave a review and get 10% off → Goal: Review form fills
Email 5 - Give 10 euros, get 10 euros → Goal: Referrals
For subscribers (non-buyers):
Email 1 - Thanks for subscribing! Here’s 10% off → Goal: Conversions
Email 2 - Discover how [Brand//Product] works → Goal: Website visits
Email 3 - Find out why we’re rated 4.5 → Goal: Brand trust
Email 4 - Enjoy 10% off your 2nd order → Goal: Conversions
Cross-Sell Flows
Objective: Incentivize a repurchase after the initial purchase.
Recommend complementary products
Suggest upgraded versions of what they purchased
Replenishment Flows
Objective: Repurchase of the same product.
Email 1 - Sent when the customer is predicted to run out
Email 2 - Sent 24 hours later with a different subject line
Email 3 - Sent 48 hours after with an offer incentive
These emails work well because they have high open rates driven by delivery tracking expectations.
Cart and Browse Abandonment Flows
Objective: Recover high-intent users.
Tactics:
Scarcity (limited stock)
USPs and social proof
Discount or free shipping offers
Suggested flow:
Email 1 - 1 hour after abandonment
Email 2 - 24 hours later with a new subject
Email 3 - 48 hours later with a time-sensitive incentive
Winback Flows
Objective: Reactivate dormant customers.
Email 1 - After the average time between orders for your category
Email 2 - 30 days later + 10% discount
Email 3 - Another 30 days later + 15% discount
Use emotional re-engagement: highlight benefits, values, or ask for feedback.
PRO TIPS
Add SMS/WhatsApp: Boost reach where email performance is low.
Offline Mail: Costlier but effective for high-value inactive customers.
Build Email Personas: Use post-purchase survey data to segment by “job to be done” and personalize communications.
Different formats for different personas = higher engagement and more conversions.