How we helped Dr. Squatch use email marketing to increase their 6-month customer lifetime value (LTV) by 10%.
See a breakdown of our customer lifecycle approach to improve 6-month customer LTV with email marketing.
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What We've Done Together
23.90%
Ended up making 3 or more purchases
30.59%
Ended up purchasing from more than one product category
5.40%
Ended up starting a subscription
Dr. Squatch is a direct to consumer brand for natural men’s personal care products. Their high quality, natural & healthy products are an alternative to the cheap and harmful mass-produced versions often found in the market. Their soaps, hair care, deodorant, and other personal care products leave customers smelling and feeling fresh. They’re best known for their unique Youtube commercials, Super Bowl ad & highly anticipated limited edition collaborations with popular brands.
Dr. Squatch has been working with Longplay since 2019 but as the company has grown, one of the key company-wide goals they had was to increase their 6-month customer lifetime value (LTV) by 10%. They turned to Longplay to collaborate on developing a strategy for email to be a sustainable, scalable channel to support this goal.
The Approach
Unlike most agencies, our Longplay team builds custom email strategies for each client by starting with a fundamental understanding of effective retention & lifecycle marketing.
The end goal was to identify the highest ROI email strategy to increase their 6-month customer lifetime value in a scalable and sustainable way.
To do so, the Longplay team started by:
- Breaking down the goal to identify the possible levers to improve this KPI
- Identify the customer groups with the highest potential ROI
- Build & execute a complex customer journey designed to launch quickly, gather data and allow room to pivot if needed
Step 1: Breaking Down The Goal
The first step was to break down the big goal into specific levers that could be directly targeted.
A customer’s 6-month LTV is simply how much money a customer spends within a 6-month period which the Longplay team recognized was made up of two factors:
- AOV (average order value): This is how much a customer spends each time they purchase
- Purchase Frequency: This is how many times a customer purchases
This means there are two ways to increase 6-month LTV: by increasing average order value or by increasing purchase frequency.
The second strategic decision the Longplay team collaborated with Dr. Squatch to make was which customer cohort would have the highest potential ROI. Dr. Squatch offers multiple product lines (soap, deodorant, hair care, and toothpaste) and multiple purchase options (single purchase, bundles & subscription):
This meant they had multiple different sets of customers, each with different lifetime values & different customer journeys:
- Non-Subscription Purchasers (Soap Only): Customers who didn’t start a subscription and only bought soap
- Quarterly Soap Subscribers: Customers who started a quarterly subscription for soap
- Non-Subscription Purchasers (Multiple Categories): Customers who didn’t start a subscription and bought from multiple product categories
- Monthly Soap Subscription: Customers who started a monthly subscription for soap.
Step 2: Identify The Areas With The Highest ROI
Through reviewing customer data, we discovered that Quarterly Soap Subscribers had the highest LTV but that Non-Subscription Purchasers made up 80% of their customers which helped us identify that One-Time Purchasers were the customer segment with the highest potential ROI.
Since Dr. Squatch had a great first purchase conversion rate, we decided to focus on the customer’s 6-month Post-Purchase Nurture journey which allowed us to tackle the goal head-on by methodically building a customer’s 6-month journey for these objectives:
- Subscription %: Increase the % of customers who purchase a single order on their first purchase to convert to a subscription within 6 months
- Product Adoption %: Increase the % of customers who have purchased from more than one product category
- AOV: Get customers to buy bundles rather than individual products
Step 3: Building The Flow
At Longplay, we always start every major flow project with a Flow Map. The purpose of a Flow Map is to allow us to collaborate with our clients in building out the ideal customer journey and making sure the strategy is aligned with business objectives prior to starting creative.
The entire flow spans 6-months and the flow map was structured by incorporating multiple strategies to tackle specific business objectives:
- Post-Purchase Upsell: An incentivized cross-sell series early on in the flow to immediately increase LTV and product adoption leveraging show/hide blocks to only recommend them products they haven’t purchased
- Loyalty Program: Incorporating their Loyalty Program throughout the flow to improve retention.
- Conditional Splits: Splits to check if their package was delivered to ensure no preemptive selling which would be a bad customer experience.
- Quarterly Subscription Upsell: Upselling customers on a Quarterly Subscription (their highest LTV customer group) in the optimal time frame after receiving their purchase
- Strategic Cross-Selling: Through customer surveys, the Dr. Squatch team realized that a large % of customers weren’t aware of the other product categories they had available. By introducing customers to new product categories and sending them down different customer journeys depending on whether they showed interest or not
- Replenishment Downsell: Ensuring that even if customers don’t convert to a Quarterly Subscription, we still maximize their LTV by encouraging them to replenish their purchase with strategically timed reminder emails
The Results
Within 60 days, of the One-Time Purchaser PPN flow quickly became the 2nd highest revenue generating flow (after the Welcome Flow) and made up 15-20% of all revenue generated by flows for Dr. Squatch.
From all the customers entering the flow:
- 23.90% ended up making 3 or more purchases
- 30.59% ended up purchasing from more than one product category
- 5.40% ended up starting a subscription
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