eCom Unity #16 - Retention Data Out of This World

Deep-Dive | What Growth Looks Like

Last week, I asked the team to send me the names of our 8 & 9 figure customers at Klar that grew the fastest in 2024.

I wanted to look at their data to see if I could find any commonalities.

Upon checking, things became obvious very quickly.

All these brands had retention numbers that most eCom founders can only dream of.

But it’s true. Brands like this exist.

100% revenue extension per customer (compared to the first order) after 12 months is seen by many as the gold standard for high retention and product market fit.

Some of these brands are reaching this in as little as 4 months. Most of them do food, beauty and supplements.

And these are not subscription-only brands.

Strong retention like this leads to compounding growth as your existing customer base continuously generates an ever-increasing baseline of revenue.

But it’s also not like these brands only rely on their retention to grow.

All of these brands acquire more than 10k new customers per month. And some even cross 100k in certain months.

Having such strong retention allows them to get extremely aggressive when setting their customer acquisition costs target.

Allowing them to simply outspend their competition.

Because once your CLV/CAC is at a solid ratio (usually around 2.5-3), extracting more profit from each customer does not maximise total profitability.

However, you can use this increased CLV to invest more in acquiring new customers (as long as your marginal returns remain reasonable).

Why? It allows you to tap into new, more expensive market segments to acquire more and better customers.

Someone asked me recently if I think that a brand can reach such strong retention performance early on, without having established a certain level of trust/awareness over a longer time before.

In my experience, retention is driven mostly by the product and the brand. But less the awareness and more the affinity that people build with it.

I have hardly seen any cases with meaningful changes in retention without major changes in either one of these.

There might be some changes as you get larger as you are omnipresent but that only is the case when you become really big.

Unlike the previous newsletters, there is not a clear action item in this one.

Instead, I wanted to show you what is possible and inspire you ✌️ 

Upcoming Events | Meet The Brand: Coffee Circle @ Berlin

Less than one week left until we meet at Coffee Circle in Berlin to sip on creative coffee cocktails, enjoy tasty finger food, and connect with fellow eCommerce leaders.

To any brand operator who’s into coffee & behind-the-scenes insights of a sustainable eCom business, this is your last chance to save a spot.

February 12, from 6.30pm @ Coffee Circle Café in Berlin.

You can still get on the waiting list for the ECommerce Berlin Expo Aftershow Party. If you haven’t done so yet, apply for a ticket here: Save a Free EBE Afterparty Ticket.

Thank you for reading :)

I am on a mission to help eCom brands build better, more profitable businesses. If you missed any past issues, you can catch up on all of them here.

I have built one 8-figure and one 9-figure eCom brand in the past and with Klar, I work with over 700 eCom brands today.

If you have specific questions you would like me to cover next, just reply to this email.

Have a great week.

Max ✌️

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