Customer loyalty is the backbone of any successful business.

But how do you know if you’re truly retaining your customers or just cycling through expensive new acquisitions?

We believe that understanding your customer lifecycle is the key to long-term growth.

Let’s break down how you can assess your customer retention through your email program.

1. Identify Your 'Base'

Before you can measure customer loyalty, you need to understand who your customers are. Start by categorising them:

• New Customers: Those who have been added to your email list in the last 365 days. This is your fresh pool of potential repeat buyers.
• Repeat Customers: The ones who come back regularly. They don’t need much prompting; they already trust your brand.
• Stale Customers: Those who used to buy but haven’t in a long time. They’re at risk of being lost for good.

By identifying these groups, you can tailor your email campaigns to target each one appropriately.

2. Why Repeat Customers Matter

Repeat buyers are the gold standard of business growth. Why? Because they cost far less to retain than acquiring a new customer. Plus, their purchase cycle is shorter—they already know and trust your brand, so they’re more likely to buy again without hesitation.

Segmenting your audience into:

• Prospects vs. Buyers
• First-Time vs. Repeat Buyers

It helps you track retention and make better marketing decisions. A healthy business should have a solid base of repeat buyers who sustain growth without the constant need for expensive advertising.

3. A Shrinking Base = A Red Flag

What happens if revenue is growing, but your base of loyal customers is shrinking? It’s a warning sign.

This often means you’re spending more on acquiring new customers but failing to keep them. If your retention is weak, you’ll find yourself in an unsustainable cycle, constantly paying for new customers who never stick around.

A big marketing push, like a sale or seasonal ad campaign, may temporarily shrink your base, but it should rebound once the campaign ends.

If it doesn’t, you need to take a closer look at your retention strategies.

What Next?

If you’re noticing a decline in repeat customers, it’s time to act. Start by reviewing your email engagement and segmenting your audience.

Are you sending the right messages to the right people? Are you rewarding loyalty and nurturing new buyers?

Stay tuned. Next newsletter, we’ll dive into the category lifecycle and how it plays a role in keeping your business sustainable.