Where most eCommerce profits die ๐Ÿ’€

Picture of Siim Pettai

Siim Pettai

Retention marketer for eCommerce brands

Back when I worked in tech recruitment, there was this concept called the โ€œValley of Death.โ€

Itโ€™s the period between the candidate saying โ€œyesโ€ to a job offer, and actually starting their new job.

As a recruiter, how you navigate the VOD separates you from the rookies โ€” and hereโ€™s why:

Every time a candidate gave a verbal agreement, less experienced recruiters would sit back, relax, and assume their jobโ€™s done.

The more seasoned recruiters? Theyโ€™d still be nervously biting their fingernails.

Why is that?

Because senior recruiters knew that getting a mere โ€œyesโ€ from the candidate means very little.

There are a million things that could happen during VOD.

A juicy counter-offer from their boss.

A partner, or close friend convincing them to stay at their current job.

In some cases, even ghosting could happen.

Point beingโ€ฆ for one reason or another, the same candidates who were so motivated to switch jobs, all of a sudden werenโ€™t so eager anymore. 

As a result, your efforts have gone to waste, and so has your project.

In eCommerce, the Valley of Death is the period between the first and the second purchase.

Thatโ€™s where the most customer churn happens. 

Let’s say you test a new offer on Meta.

Day 1, nothing happens. Day 2, the first few customers start rolling in. By Day 21, youโ€™ve made hundreds of sales.

A junior marketer would probably jump out of their chair, and start browsing vacations to the Bahamas.

But when you look closely, you realize your return on ad spend (ROAS) is 1.1x, while your direct competitors are hitting a whopping 1.6x.

Youโ€™re still miles away from building a profitable business. 

Senior marketers know that the first purchase is just the beginning of the relationship. 

And the only way you can get away with a lower ROAS is by increasing your repeat purchase rate.

Below is a flow chart consisting of 18 steps required to navigate through the eCommerce Valley of Death.

If youโ€™re struggling with repeat customer revenue, pay close attention to this:

eCommerce Valley of Death

Thatโ€™s right. 18 steps just to give yourself a shot at a customer repeating a purchase.

For most brands, the Valley of Death lasts 30โ€“60 days. And the more expensive the product, the longer it usually takes to win that second purchase.

And hereโ€™s the truthโ€ฆ

Even if you religiously follow all 18 steps, the odds of them buying again are still less than 50-50.

Thatโ€™s how difficult retention is โ€” the game is stacked against you.

But if you can increase your retention rate from 25% to 32%, that might be all you need to unlock new levels of profitability and growth.

If you want to see exactly how a top DTC brand survives the Valley of Death, I just published my first post-purchase marketing breakdown.

I dissect it step-by-step, analyzing the actual emails they send.

Have a read below:

Post-Purchase Marketing Flow Analysis #1 (Loop Earplugs)

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