Your retention program isn't actually doing retention

One of the biggest reasons CPG brands don’t do things that move the needle on their retention is because they are too busy doing things that don’t move the needle on their retention.

I speak from experience. A lot of our work still comes down to doing email marketing, which usually, after you’ve set up the flow foundation, comes down to planning and managing email campaigns. (For those who don't know - email campaigns are one-time sends, not automated, fixed sends)

And as someone who does both email marketing and retention marketing, I have a clear picture of how they actually overlap.

The situation with most brands

Most CPG brands, when it comes to their CRM in general, are the most preoccupied with their email campaigns.

This is what the client-agency journey typically looks like:

1. Brand starts working with an agency

2. The agency builds core flows and the popup

3. Once the flows are built, the agency starts sending weekly campaigns, anywhere from 2-4 per week

4. The agency keeps focusing on campaigns, and does a few tests on core pre-purchase flows like welcome and checkout abandonment from time to time.

When I say brands are preoccupied with their campaigns, I really mean it. They spend a shit TON of time and effort on revisions of every single detail of each campaign. They obsess over copy, CTA, design elements, transitions, colors and more.

Both the agency and the brand spend enormous amounts of time on that stuff. Oftentimes it’s so much that it almost becomes a full-time job.

You will often see a process like this:

1. Agency submits a copy draft for an email campaign to the brand

2. The brand adds comments on the copy

3. Agency makes edits and submits again

4. The brand approves the copy

5. The agency designs the email and submits the design for review

6. The brand adds 14 comments on different elements of the design

7. The account manager briefs the copywriter and designer to make the edits, which takes some time

8. The account manager submits the updated version for approval

9. The brand adds 3 more comments because they don’t like the color transitions of the 3rd section of the email. They also remember they’d like to change the copy a bit although they’ve already approved it initially. Why? Because now when they see how the copy actually fits in with the design, they’re not satisfied.

10. The account manger briefs the copywriter and the designer again to make the edits again, which again takes time

11. The account manager submits the final version for approval

12. The brand approves (or maybe it adds more comments)

13. The agency schedules the email

And all this is for one single email campaign.

Bear in mind that campaigns are one-time sends, not automated, fixed sends. Each campaign is different. They're not permanent communication touchpoints in the customer journey.

This means every new campaign needs to be conceived, built and approved from scratch.

And bear in mind that most brands send 3-4 of them per week.

Now, to all this add multiple team members that bigger brands usually have, all with slightly different viewpoints and opinions, and you will get a chaos of activities that BARELY move the needle for the brand on the retention side.

What these brands are NOT doing while they’re focusing on all this

Because they’re too busy with revising design on their email campaigns, they are not:

• Testing the frontend offer on their product page - is the their main offer actually built for retention?
• AB testing their gift / loyalty strategy - which gifts / rewards actually move the needle on retention and what’s their impact on unit economics?
• Optimizing their pre-delivery experience - they are not aware of the fact that 2-3 right messages at the right time during this window can make or break their retention.
• Optimizing the post-delivery experience - apart from sending a boring email on “how to use the product”, they do nothing outside email to make sure the customer actually adopts the product and starts using it consistently.
• Optimizing the repurchase phase - their billing reminder simply says “your card will get charged in 3 days”.
• Optimizing their cancellation survey in the customer portal - whether it’s Recharge, Skio, or Loop, 99% of brands have never customized and AB tested their cancellation flow to decrease subscription churn.
• Optimizing their win-back flow - they probably have 1 or 2 emails in this flow and call it a day.
• Customizing their transactional emails - one of the most valuable pieces of real estate for every CPG brand out there, but most brands simply continue to use the basic templates from Shopify.
• Sending qualitative surveys to identify early loyalists and churn risk customers - with this data you can actually personalize your content and send people stuff that’s actually relevant for their journey.

The Retention Paradox

Most retention agencies calling themselves retention agencies aren’t actually doing any retention because they’re too busy with stuff that doesn’t move the needle on retention.

I am not even saying that some of them don’t know how to do retention. It’s just that they literally can’t do it because there’s 100x of other things that make almost 0 difference for retention, like email design and CTAs in email campaigns, that they have to do because the brand requires them to do so.

So, is the blame on Agencies or Brands?

I would say both. A good retention team should be able to define priorities strictly. It should be able to strictly split what’s important from what is not.

For example, if you’re working with an 8-figure, subscription based supplement brand, you know that the biggest lever for retention will be how you frame the subscription offer on the product page and how you onboard people to increase product adoption in the first 2 weeks.

It’s definitely not polishing your email design so it looks as close to Grüns as possible and spending dozens of hours on it.

Am I saying email campaigns and email design are not important? Hell no. They are, but only after you've optimized the hell out of your foundation. They should get a portion of your focus as a brand or retention team, not 90% of it.

A good retention team should act as a doctor. The doctor prescribes to the patient what they need, not the other way around.

The problem is that a lot of agencies work like factories, defining their scope of work by the number of emails they send and similar. But not necessarily because they’re bad. Simply because the whole system is made that way.

We still lack sophistication on the market. Too many CPG founders associate email marketing with retention, and agencies simply adjust their offering to what the founders are looking for, which is sending pretty emails.

Sending emails is the core activity of today’s “retention” agencies and the majority of operations revolve around planning and designing these campaigns.

And in all that, ironically, while doing all that, brands forget to focus on things that actually make a difference for their retention.

The result is often jumping from agency to agency when they realize the dashboard looks great but the money in the bank keeps shrinking.