Is it acquisition or retention? A diagnostic framework for why customers don’t come back

Let’s imagine that the acquisition department brings customers at a fantastic cost per acquisition. The acquisition team is happy. They managed to stay within their budget and acquire more people with it. But six months later, you discovered that most of those customers never bought again.

The question is: Which problem is that? Is it a retention problem because the company failed to keep those audiences? Or is it an acquisition problem because the team attracted the wrong audience in the first place? 

The panelists discussed these questions during the panel discussion “Retention is broken: Why eCommerce brands lose customers after the first order” at the RARE conference:

Dmytro Kudrenko, Founder and CEO of Stripo, and Alex Danchenko, Co-founder and COO at Yespo, moderated the discussion.

In this article, we will look at how to determine where the problem occurs: at the customer acquisition stage or after the first purchase. We will also show which signals can help distinguish poor acquisition from customer experience problems.

Key takeaways

1. Retention starts before the first order.
2. A customer who does not return is not necessarily a poor-fit customer. Look at their buying patterns and customer value.

Start with the acquisition source

Businesses should use different strategies for customers who come through different channels. Always track the sources of new customers and try to segment your further communication based on how a contact entered your database.

A simple test you can run is to check whether the problem with repeat purchases appears among customers from a single source or across multiple sources.

For example, imagine you are acquiring many customers through Facebook at a low price. They make a first purchase, but few come back for a second. Compare their behavior with customers from other acquisition channels. If only Facebook customers fail to return, the problem may be with the acquisition source. But if customers from all channels behave the same way, it may be time to look at the product or service you offer after the purchase.

To check whether the problem is related to a specific acquisition source, store the source for each new customer in your database and compare customer behavior across channels. Look at metrics such as welcome email engagement and repeat purchases. If one channel performs noticeably worse, investigate that source. If the results are similar across channels, look further into the post-purchase experience.

But this comparison only works if the conditions of acquisition are also comparable. For example, if you offered the same discount across all channels and customers from all of them showed similarly low repeat purchase rates, the acquisition source may not be the reason. The discount itself could be affecting their decision to return. In this case, compare customers acquired with different offers or without a discount before deciding that the problem is the post-purchase experience.

At the same time, don’t draw conclusions from very small samples or short seasonal periods.

Check the promise you made during the acquisition

Even if the problem is not limited to one acquisition source, it doesn’t necessarily mean that you are dealing with a retention problem. The next step is to check what expectations the customer had when they came to the brand.

Acquisition is the first promise you make to your customer. So if a recipient bought once and never comes back, there are two things worth looking at:

1. First, analyze the welcome experience. What happens after the customer joins the email list? What messages do they receive, and how often?
2. Second, check whether the messages the contact receives during acquisition match their welcome experience. Does the customer feel that they were promised something that the brand didn’t deliver?

Examine how discounts shape the first purchase  

During the discussion, the speakers agreed that using a discount for acquisition doesn’t always work in favor of retention. A discount sets certain expectations for customers and can influence their future behavior. If you acquired a customer only because of a large discount, they may be shocked by the full price and unwilling to buy again. It is like starting a relationship on the wrong foot.

This raises the question of what brands should do about Black Friday. It is one of the biggest acquisition seasons, but most brands offer big discounts during this period. Does this mean that brands will be unable to retain these customers and secure repeat purchases?

According to the experts, the real issue is the motivation a discount creates for the purchase. So, even during major sales periods, it is worth thinking about what else can connect a customer with the brand.

Events such as Black Friday can be a conscious compromise. However, if you want to preserve customer lifetime value, don’t focus only on discounts. There are other ways to give people a reason to buy from you. For example, some businesses donate a certain percentage of the product price to charity. In this case, the customer receives more than a discount. They get the feeling that they are helping others by buying from this business.

Customers acquired through a major promotion can be tracked separately after the campaign. Use their post-promotion behavior to decide how to communicate with them and when to transition them to your regular customer journey.

Even after you check the acquisition source and the conditions of the first purchase, some customers may still not return. Now, you need to understand the main question: Are these really customers who are not a good fit for your business, or did the brand lose them because of a poor customer experience?

How to distinguish a poor fit from a bad experience

A question email marketers often ask themselves is how to distinguish a “bad” customer, meaning a customer who spends little, from a “good” customer, who just had a bad post-purchase experience.

Geneviève Masioni says that there is no such thing as “bad behavior.” The fact that someone doesn’t buy multiple times doesn’t mean they aren’t the type of customer you need. A poor-fit customer is someone who has gone through your re-engagement, win-back, and sunset campaigns without responding to any of them. Only then does it make sense to remove them from your email list.

Before you decide that a customer is a poor fit, look at more than just purchase frequency. Andrei Georgescu recommends looking at more than just purchase frequency. Analyze customer behavior, profitability, order size, and revenue. Revenue alone is not enough because a customer who spends a lot can still be unprofitable if their purchases involve large discounts.

Someone may have made only two orders, but they were large. Another customer may buy frequently but purchase only one product at a time. There are different buying patterns that a company can encourage. One way to work with them is to segment customers based on their purchasing habits: those who buy in bulk, those who buy frequently but have a lower average order value, and those who buy only during sales. 

You can then adapt your communication to each segment based on what they want to hear from you and when they want to hear it. Segmentation also shows you different behavior patterns and helps you avoid treating all customers who haven’t made a repeat purchase as one group.

With Display Conditions in Stripo, you don’t need to create a separate email for each segment. You can show different content to different recipients within the same email based on the conditions you set.

Having many segments means a lot of work. To make sure these efforts are worthwhile, ask customers questions and run surveys to understand why they take certain actions. These surveys can help you assess whether it makes sense to spend time creating a particular segment and whether it includes enough people to be useful. Then, focus your efforts on the segments with the highest potential.

Ask customers instead of guessing

Behavioral data have their limits and do not always explain why a customer acts in a certain way. In such cases, the most reliable way to test your hypothesis is to ask the customer directly.

For example, a company selling mineral foundations noticed that customers rarely came back for a second purchase, even though it needs to be replaced regularly. After asking why, they found that many customers didn’t know how to use the product correctly and were unhappy with the results. The company then started sending new customers a post-purchase email with a video showing how to apply it.

To collect this kind of feedback, create points of interaction where you can ask customers different questions to understand their needs, the problems they face, and more. Don’t ignore the opportunity to ask customers about the reasons behind their actions.

When analyzing customer and purchase data, the expert Maciej Raczak also recommends keeping the customer’s emotions in mind. These emotions often come before or influence a purchase decision. When focusing on deals or transactions, it is important not to lose sight of customer experience and personalization.

The biggest lies brands tell themselves about retention

Although retention is widely discussed, businesses still have many misconceptions about what actually drives customer loyalty. Experts who work with eCommerce businesses every day see these misunderstandings firsthand.

Brands often treat retention as a messaging task: build flows, automate them, and send more emails. Retention depends on customer behavior, and automation only supports it. Companies should ask themselves, “Why are we sending this message to the customer? What do we want them to do?”

The obvious answer is, “We want them to buy from us.” This is the final action. We also want customers to tell us about themselves and how they use the product.

Andrei’s point is about the purpose behind each message, so brands still need to communicate. Geneviève looked at the same issue from the product side.

Geneviève’s point is that customers need guidance at every stage of the journey, including after the purchase. Different messages can help address customers’ doubts and objections.

Very often, brand owners or company employees see a product or service differently from their customers. The path a customer takes to make a purchase decision can be very different from the path that people who know the product from the inside would take. This gap in perspective can create communication biases that ultimately hurt customer retention.

Retention diagnostic checklist

Before blaming retention for the fact that customers don’t come back, ask yourself:

1. Does the problem affect only one acquisition source or all sources?
   
   If customers acquired from a specific source rarely make repeat purchases, analyze that source first. If the same trend appears across all channels, look at what happens after the purchase.
2. Does the promise made during acquisition align with the customer’s experience once they begin interacting with the brand?
   
   Check whether the message that attracted customers matches what they see after subscribing to your email list or making a purchase.
3. Was a discount the main reason for the first purchase?
   
   A large discount can create an expectation of low prices and make future purchases at full price less appealing.
4. What was the customer experience after the first purchase?
   
   Analyze the product, service, and post-purchase experiences. Look at return reasons, customer support tickets, product reviews, and NPS responses collected after delivery. This can help you identify problems that may prevent customers from returning. For example, customers may not return because they don’t know how to use the product or because the experience didn’t meet their needs.
5. Have you asked customers why they didn’t come back?
   
   Customer feedback can reveal needs and reasons for dissatisfaction that cannot be explained by behavioral data alone.
6. Are you evaluating customer value based only on purchase frequency?
   
   Consider the actual patterns in customer behavior. One customer may place fewer orders but spend more, while another may buy frequently but spend less each time.

Wrapping up

Retention starts before the first order. And when customers don’t come back, start by finding out why they left, and only then plan the win-back email. 

To do that, listen to your customers. And when you don’t know what they think, ask them. Then, use what you learn to shape your communication. Keep collecting data and improving both your acquisition and retention processes over time.