Subscription and DTC ecommerce marketing
The value of a customer is not in the first order. It is in the fiftieth.
If you sell something people buy repeatedly, whether by subscription, by standing order or simply by habit, almost every marketing decision you make should be priced against what a customer is worth over their lifetime rather than what they spent today. Most are not and that is where the money goes.
Who this suits
- You sell on subscription, standing order, replenishment or repeat purchase.
- Your customers buy weekly, monthly or on a predictable cycle.
- You can see what a customer spends over time or you could if the data were connected.
- You are spending on acquisition without a settled view of what a customer is actually worth.
What is different about a repeat purchase business
Cost per acquisition is the wrong headline
On its own it tells you nothing. A £40 acquisition cost is excellent if the customer stays two years and ruinous if they leave after one order. The number that matters is how long until a customer pays for themselves.
Churn does more damage than conversion rate
A small improvement in retention compounds across every customer you have ever acquired. A small improvement in conversion rate applies only to the people arriving this week.
The cancellation window is minutes, not days
Someone cancelling is a moment with a very short window. If catching it depends on a person noticing, it does not get caught.
Acquisition and retention get reported separately
So nobody can answer the only question that matters, which is whether the customers you are buying are the customers who stay.
Different customer types distort each other
If you sell to consumers and to trade or across very different products, a blended number hides both. One is usually subsidising the other and nobody can see which.
How we work with this model
- Establish what a customer is actually worth
- Before anything else. What they spend, how long they stay, how that varies by how they were acquired. This is arithmetic, not opinion and once it exists every other decision gets easier.
- Set the acquisition target against that number
- Not against a first order and not against an industry benchmark. The target is the point at which a customer pays back the cost of acquiring them within a period you are comfortable with.
- Separate customer types in the reporting
- Consumer and trade or product line by product line, so one is not quietly flattering the other. Where one campaign genuinely helps another, we account for it rather than reading the surface number.
Retention and connected reporting
- Build the retention automations that have to run without anyone
- Welcome, replenishment, win back and cancellation triggered sequences, built from your operational data rather than from what the email platform happens to know.
- Use the channels that actually get seen
- Email as the backbone, with WhatsApp or SMS where the message genuinely warrants the intrusion.
- Connect it in one place
- Live reporting across advertising, ecommerce and retention, so the relationship between what you spend and what a customer becomes is visible daily rather than assembled monthly.
The calculation that changes everything
So the first week pays for the acquisition. Every order after that is contributing margin.
That is a simple calculation and it is the most useful thing we establish for a business like this, because it turns every strategic question into an answerable one. Should we spend more. Is retention worth investing in. What happens if cost per acquisition rises in winter. All of those become arithmetic rather than opinion.
Retention is where the margin lives
Acquiring a new customer costs money every single time. Contacting an existing one costs almost nothing. When acquisition is running at roughly the value of a first order, every repeat purchase after that is where the business actually makes its money. Retention is not a nice extra in that model. It is the business model.
The automations that matter most are the ones that run on operational triggers rather than on a schedule. A cancellation, a missed delivery, a lapsed order pattern. Those are the moments where a customer is decided and they are all too fast for a person to catch reliably.
What we will not tell you
What we need from you
- Access to your ecommerce platform or order system, which is essential for any lifetime value calculation
- Clarity on margin by product line, so we are not driving volume on your least profitable item
- Your trading and promotional calendar far enough ahead to plan against
- A named person who can approve a campaign within a day or two
Common questions
We do not know our lifetime value. Can you work it out?
Usually yes, from your order data. It is one of the first things we do, because almost nothing else can be decided sensibly without it.
What is a good cost per acquisition for a subscription business?
There is no useful benchmark. The only meaningful test is how quickly a customer repays it and how confident you are that they stay. A number that is excellent for one business is fatal for another selling at a different price and frequency.
Should we spend more on acquisition or retention?
Almost always retention first, if the automations are not running properly, because it is cheaper and it improves the return on every pound of acquisition you have already spent. Then scale acquisition against a number you trust.
We sell to consumers and to trade. Does that complicate things?
It does and it is a common reason blended numbers mislead. We structure campaigns and reporting so the two do not distort each other, including where one genuinely creates demand for the other.
Do we need to move to Klaviyo?
Only if your current platform cannot connect to your purchase data properly. Migrations cost money and lose history, so we do not recommend them casually.
Work out what a customer is worth
Answer a few short questions to find the right starting point, or explore the Growth Audit for an independent read on acquisition and retention together.