Understand Your Business
Chapter 3: Find Your Biggest Retention Gaps
A retention gap is a point where customers could move forward but encounter a missing reason, unanswered question, or disappointing experience.
Start by locating the gap. Then decide whether email, SMS, the product, or another part of the business is best placed to address it.
Section 1
Inspect the journey
Subscriber to first purchase
Look for: Weak alignment between the signup offer and what you sell.
Ask: Did subscribers join because they want the product or only the incentive?
Inspect: Signup source, welcome experience, first-purchase behaviour, and landing pages.
Interest to checkout
Look for: Unanswered product questions or unclear value.
Ask: What would someone need to know before choosing?
Inspect: Product pages, customer questions, and abandonment messages.
Checkout to order
Look for: Friction in the purchase process.
Ask: Are costs, delivery expectations, or payment issues changing the decision?
Inspect: Checkout experience and customer support feedback.
First order to product success
Look for: A gap between the promise and the experience.
Ask: Does the customer know how to use the product and get help?
Inspect: Delivery communication, onboarding, returns, and feedback.
Product success to next purchase
Look for: No clear or relevant next step.
Ask: Is there a sensible complementary, repeat, or replenishment purchase?
Inspect: Product relationships, buying intervals, and post-purchase communication.
Section 2
Separate evidence from a hypothesis
Observation → possible explanations → evidence to inspect → next action. No single metric proves the cause.
Use Chapter 2’s seven metrics to locate the question: subscription-to-purchase and 30-day purchase rates point toward acquisition and onboarding; repeat purchase rate and time between orders toward the experience and next purchase. Customer lifetime value, revenue per subscriber, and returning-customer revenue share put those findings in business context.
An observation tells you what happened. A hypothesis proposes why it happened. Keep them separate.
Illustrative example
Observation: An equally aged signup cohort has a lower 30-day purchase rate than the previous cohort.
Possible explanations: Poor-fit traffic, an incentive attracting the wrong people, unclear product value, or checkout friction—not necessarily a weak welcome flow.
Evidence to inspect: Compare signup sources, preferences, landing pages, welcome engagement, checkout drop-off, and support questions. Check offer and stock changes.
Next action: If one source attracts poorly matched subscribers, test a more product-relevant promise there and compare fully matured cohorts.
Section 3
Choose what to investigate first
Prioritize issues with meaningful customer impact, credible evidence, and a practical next action.
Your opportunity list
Saved on this deviceOpportunity 1
Section 4
Use the right fix
Not every retention problem needs another flow. If customers receive a confusing product, fix the instructions or product experience. If a useful next purchase is hard to discover, improve how it is introduced.
Email and SMS should support the fix rather than hide the underlying problem.
Section 5
Apply this to your brand
Calculator estimates depend on your inputs and its assumptions. Treat estimated opportunity as a guide to investigation, not guaranteed recoverable revenue.
Closing takeaway
Leave this chapter with one clearly stated gap and one next action. You can revisit the rest after you learn from the first improvement.
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