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Ecommerce Operations16 of 20

There is a number your business is not calculating that is almost certainly the most important

Chris Wheeler

There is a number your business is not calculating that is almost certainly the most important commercial number it generates. It is the revenue value of the customers acquired last year who did not return.

It requires two things. The number of customers who purchased once in the last twelve months and have not purchased again. And the average revenue of a customer who did return at least once in the same period. The product of those two numbers is the commercial cost of your first-purchase retention gap, expressed as revenue that should be in the business and is not.

In the ecommerce businesses I have looked at closely, that number is consistently larger than the annual acquisition budget. The business is spending more money acquiring new customers than it would cost to retain the ones it already paid to acquire. And the retention gap is not a CRM problem or a product problem or a customer service problem. It is a post-purchase journey problem that nobody owns because it sits in the gap between the acquisition metric completing and the retention metric being measured.

Calculate that number. It will change the conversation you have with your leadership team.

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