The Myth of Retention: Understanding the Buying Journey in Ecommerce

– Retention is not solely determined by a brand or its actions, but rather by perceived value, timing, and need.
– Emails from companies can only influence retention if they reach the recipient at the right time, but timing is difficult to predict for most products.
– Instead of focusing on retention, businesses should focus on understanding when someone is looking to purchase, what matters to them in a product, and building a journey that helps them make that decision.Focus on understanding when customers are looking to make a purchase, what matters to them in a product, and build a journey that helps them make that decision.Retention isn’t real. A brand has little to do with retention; a brand’s actions have even less to do with retention beyond reminding someone that they exist. There are three parts to business: creation, distribution, and utility. Creation is easy; make stuff. Distribution is tough; it’s a combination of marketing, awareness, product-market fit, and trust that results in a transaction. Utility is completely up to the individual purchasing the good and their perceived value of the item. Perceived value is a function of the price paid for an item and the amount of usage the item gets (usually more usage = more perceived value = more justifiable cost). Retention is a function of perceived value, timing, and need. It is possible that people have a good perceived value for an item, but both the timing and need are off. If I love a bathing suit but I already own four and it’s winter, guess who’s not buying, even if I have a hot tub? So for retention to kick in, need would also have to be present. I could have left a bathing suit at someone’s house (true story, it’s still there), one might get old and I need to replace it (also a true story, elastic doesn’t last forever), etc. But none of these things are actually being driven by an email. The best-case scenario is that an email from a company that’s selling the good finds its way to my inbox at the right time. There is no possible way the company could know the right time for my circumstances; you can’t know timing for the vast majority of products (for those in CPG that want to join in here, you don’t know that someone doesn’t buy from multiple CPG brands at the same time, so pipe down and stop making assumptions). The only way to influence me would be to offer some insane discount which would override my “need” and “timing” to the point where it would make sense to remove one of my current lineups because the perceived value far outweighs the price, and I would be stupid to pass it up. I left one thing out: the anticipatory purchase. This is the purchase someone makes in advance of need and timing, leveraging the feelings of a change or event to come. I’m going to leave these ones out of the analysis as events are typically not good markers for behaviors besides New Year’s resolutions and health to a degree. So everyone that keeps preaching retention with budgets getting smaller, it’s time to check yourselves. You’re guessing, sometimes you get it right but there’s no real control you have over the leading reasons why people purchase. Instead my little acquisition friends, what you can do is find out when someone is looking to purchase, what matters to them in a product, and build a journey that helps them make that decision.More product in hands = more chances for a good experience = more chances for repeat purchasers. This is how buying journeys actually work. #ecommerce #customerjourney #retention

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