REPEAT COMMERCE: 02 - Run The Math Before You Raise The Ad Budget

You've probably heard this statistic at least 100 times.

Improve customer retention by 5% and profit jumps 25 to 95%.

It probably is one of the most repeated numbers in retention marketing.

It's on every software landing page, every agency pitch deck, and I'm pretty sure it's legally required to ap-appear on any article with the word retention in the title.

But it also comes from a 1990 study of banks, insurance brokers, and auto service companies, not Shopify stores.

Not a brand paying Meta $40 to acquire someone who used a 15% off welcome code, ordered once, and then disappeared forever.

Now, I still believe the argument behind the stat.

Retention is worth more than almost anyone budgets for.

But a 36-year-old banking study can't tell you what it's worth for your Shopify store.

So today, we actually calculate it properly with Shopify numbers, and before you raise your ad budget again, I think you need to run this math.

Welcome back to Shopify 1%.

I'm Jay Myers, and every episode gives you one specific thing you can do to make your store at least 1% better.

Now, this is episode two of the Repeat Commerce series.

Last episode, I asked you to pull two numbers, your returning customer rate and the share of your revenue coming from your repeat customers.

Now, if you did it, they should be written down somewhere.

Mine would be on a sticky note immediately beside my computer, but I would probably lose that, so then I would put it in an Apple note on my Mac somewhere.

But I trust you're more organized than me.

Just make sure you have them written down somewhere, because that sticky note is graduating.

Now, over this series, we're gonna be turning that into a proper scorecard, a running retention audit of your store, because every episode is gonna add one number or one action, and by the end, you'll have done a full retention tear-down on your store without ever blocking off an afternoon.

It'll just take one episode, and each episode is gonna give you one or two lines.

Today is actually gonna add three.

By the end of this episode, you'll run one calculation.

It's gonna take maybe 90 seconds, and it's gonna turn your, "We should work on retention," into an actual dollar amount that you can say out loud in a marketing meeting.

And then we'll compare that number against buying the exact same growth through ads, and that comparison is the part that will change the conversation.

Two strategies can produce identical revenue but actually do opposite things to your bank account.