When most brands try to answer this question, they A/B test and measure success based on conversions.

‍

Yet conversions are only a piece of the puzzle.

‍

Two challenges when optimizing new initiatives based on conversions: 

1. Brands may be targeting an audience of customers that will never buy again regardless of intervention

2. A new initiative may convert more customers, but it’s unclear if those customers will buy once or again & again 

‍

Here's how Wild Earth (pet food subscription brand)answers this question:

1. Identified high-value customers at risk of churn with90% accuracy 

2. Insights recommended their high-value customers were not impulse buyers 

3. To prove (or disprove) this hypothesis, the brand tested sending an email with a dog treat vs. a 10% off promo to a high-value subscriber that was at risk of churn.

4. They found that engaging with the free gift retained more high-value subscribers.

5. Scaling these incentives increased the LTV of high-value customers by 12% in less than 3 months.

‍

‍