Sustainable Growth Models for Online Retailers

There’s an odd concept in ecommerce that once a customer has shopped with you, they’ll always continue to. The reality is that the vast majority of ecommerce brands don’t focus on their existing customer cohort, instead obsessing over new customer numbers. This is a disaster for brands that have grown exponentially, especially in smaller populations like Australia. Why? Because even if you have 250,000 “customers”, how many of them are truly active? And how many are dormant? How do I define dormant? Those who haven’t engaged with your brand in the last 12 months. For the majority of brands we see data for, it’s something like 80% of customers who are dormant. Now, if you’re obsessing over new customer acquisition and excluding the 80% who haven’t engaged with your brand in 12 months, your addressable market is significantly smaller than it used to be. This means you can’t possibly keep scaling unless you pull other levers in your business, such as re-engaging and nurturing your existing customers. Acquiring new customers is valuable, but keeping the ones you already have is far more cost-effective and leads to greater long-term returns. The key is recognising that retaining customers takes work and should not be a business expectation. So, what’s the solution? A holistic approach to customer cohort management can breathe new life into dormant segments, turning them into active and engaged buyers again. Owned media and Meta will play a part in this. We can supercharge this through owned media by infinitely identifying your return customers and adding them to flows. This not only maximises the lifetime value of your customers but also creates a more sustainable business model, especially as you move beyond the first few years of rapid growth. Don’t let your existing customers slip through the cracks. They’re a goldmine waiting to be reactivated!

ROAS is a vanity metric disguised as a financial metric, designed for marketers who are scared to report real numbers. If you're serious about sustainable growth, answer these three questions: 1. What's your TRUE marginal CAC ceiling? This isn't your target CAC or platform CPA—it's the absolute maximum you can sustainably spend to acquire an incremental customer. Calculate your marginal CAC using real unit economics: → Start with Lifetime Value (LTV) (total revenue per customer) → Subtract all variable costs over the customer's lifetime: ↳ Product costs ↳ Shipping & fulfillment ↳ Processing fees ↳ Returns & exchanges The resulting number is your marginal CAC ceiling. Also, understand how this ceiling changes: → By product or category (due to varying margins, AOV, LTV) → Over time (seasonality, promotions, competition) Knowing your marginal CAC ceiling lets you: ✅ Aggressively scale winning channels ✅ Quickly eliminate inefficiencies ✅ Create margin-aware offers & creatives 2. What’s your Lifetime Gross Profit (LGP)? How to calculate Lifetime Gross Profit: → Identify the average number of purchases per customer (or average subscription lifespan) → Calculate gross profit per purchase (Selling Price – COGS) → Multiply the two: Gross Profit per Purchase × Average Customer Purchases Shift your focus to maximizing total gross profit generated per customer throughout their lifetime by: → Increasing customer retention rates → Boosting repeat purchase frequency → Improving your AOV 3. What’s your LGP to CAC Ratio? Your LGP:CAC ratio measures how efficiently you're turning acquisition spend (CAC) into lifetime gross profit (LGP)—giving you immediate clarity on profitability. Calculate it simply: → LGP ÷ Current CAC = LGP:CAC Ratio At your marginal CAC ceiling, this ratio hits exactly 1:1, meaning you're covering variable costs but leaving no room for fixed expenses or profit. To sustainably scale an e-commerce business, aim for an LGP:CAC ratio of at least 3:1 or higher. A higher ratio signals healthier profitability and safer conditions for growth. TL;DR: Stop relying solely on ROAS. True sustainable growth comes from: → Defining your true marginal CAC ceiling (the max you can spend per incremental customer). → Defining and maximizing Lifetime Gross Profit through improved retention, increased purchase frequency, and higher AOV. → Maintaining a strong LGP:CAC ratio to ensure every customer acquired is truly profitable. When these metrics guide your paid media decisions, marketing transforms from an expense into a high-yield investment. What key metric do you prioritize to scale paid media profitably? Let’s discuss below 👇 – ♻️ Like, comment, and repost to help out another marketer. Hit follow for more.

Let’s talk about one of the most overlooked concepts when it comes to scaling your Shopify store: Incrementality. It’s easy to get caught up in the allure of quick wins—throwing more ad spend at a campaign, expecting exponential growth. But here’s the reality: not all sales are incremental. And if you’re not tracking incrementality, you’re likely overspending and missing out on sustainable growth. So, what is Incrementality? In simple terms, incrementality measures the true impact of your marketing efforts by isolating the sales that wouldn’t have happened without your specific campaign. It’s the difference between what your customers would have done on their own and what they did because of your ads. Why is this so important? Avoiding Double Counting: When scaling, it’s tempting to credit all sales to your ads, but the truth is, some of those sales might have happened without them. Incrementality helps you identify the real impact of your marketing efforts so you can avoid double counting. Optimizing Ad Spend: By understanding which campaigns are genuinely driving new revenue, you can allocate your budget more effectively. Incrementality ensures that you’re not just spending more, but spending smarter. Sustainable Growth: Scaling isn’t just about growing fast; it’s about growing profitably. Incrementality helps you see where your true growth is coming from, allowing you to double down on strategies that lead to long-term success. Here’s how to apply Incrementality in your Shopify store: Run Controlled Experiments: Use A/B testing to measure the incremental lift of your campaigns. Compare a test group exposed to your ads with a control group that isn’t to see the true impact. Leverage Attribution Models: Move beyond last-click attribution. Use multi-touch attribution models that give you a fuller picture of your customer journey and the incremental value of each touchpoint. Focus on High-Impact Channels: Identify which channels drive the most incremental sales and prioritize them. This ensures your scaling efforts are focused on strategies that truly add value. Bottom line: Scaling your Shopify store without understanding incrementality is like driving with a blindfold on. You might get somewhere, but you won’t know how you got there—or if you’re heading in the right direction.

𝐓𝐡𝐞 𝐔𝐧𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 $𝟐𝟎𝐊 𝐑𝐞𝐯𝐞𝐧𝐮𝐞 𝐁𝐨𝐨𝐬𝐭: 𝐀 𝐋𝐞𝐬𝐬𝐨𝐧 𝐢𝐧 𝐏𝐞𝐨𝐩𝐥𝐞-𝐅𝐢𝐫𝐬𝐭 𝐄-𝐜𝐨𝐦𝐦𝐞𝐫𝐜𝐞 Alex ran an eco-friendly home goods store making $50K monthly. But constant trend-chasing left profits slim and stress high. One month it was Instagram influencers. The next, elaborate email funnels. Then Facebook ads, TikTok challenges, and podcast sponsorships. Alex was always busy, always stressed. Despite decent revenue, customer retention was low. People bought once but rarely returned. Alex came to us burnt out, questioning the whole business. That's when we suggested a "radical shift": focus on people, not trends. We implemented a strategy centered on one principle: People > Profit. We revamped product descriptions to focus on customer benefits. Started a genuinely helpful blog about sustainable living. We created a customer feedback loop and visibly acted on suggestions. Launched a loyalty program rewarding engagement, not just purchases. The transformation was significant. Within three months, monthly revenue increased by $20K. But more importantly, the business changed fundamentally. Customer retention skyrocketed. People weren't just buying products; they were joining a community. The sales process became smoother. Customers came pre-sold on the value because they trusted the brand. Alex's team felt reinvigorated. They were having meaningful customer interactions, seeing their real-world impact. Surprisingly, profit margins improved too. Focusing on retention and community-building decreased marketing costs while increasing average order value. The lesson is clear: Prioritizing genuine connection and value over short-term tactics doesn't just boost revenue. It creates a sustainable, fulfilling business model. People > Profit isn't just a nice slogan. It's the most important lesson in business, regardless of your industry. When you truly put people first, profits naturally follow. This principle transcends e-commerce - it's the cornerstone of any successful business. #PeoplePowerProfit #AuthenticBusiness #GrowthThroughConnection

Every dollar counts, but predictable dollars count more. That's the mantra of recurring income, a game-changer in e-commerce. The real growth lies in mastering recurring revenue, yet many e-commerce businesses overlook this. Think about it – consistent, predictable income every month. It's a business dream! Let's take a peek at the beauty industry. A prominent cosmetics brand transformed its business by shifting from one-time purchases to a monthly subscription model. The result? A whopping 30% increase in steady income in just six months! This isn't an isolated success. Many are doing it, and it's high time you consider it too. Here’s how to start: 1. Identify consumable products or services in your portfolio. 2. Offer a subscription model with incentives – think discounts or exclusive perks. 3. Ensure your e-commerce platform supports recurring billing and subscriptions. 4. Promote your subscription model aggressively. Use it as an upsell to every purchase. 5. Monitor metrics like churn rate and average subscription revenue to fine-tune your strategy. Remember, it's about creating value that keeps customers coming back. A subscriber today is a stable income tomorrow. E-commerce is evolving, and so should your strategy. Don't just sell products; sell experiences that customers want to be part of month after month. Dive into recurring income and watch your business stability soar. Unsure where to start? I share weekly insights on building sustainable e-commerce models. 🔄 Think this could be a game-changer for your business? Reshare and follow me, Irina Poddubnaia and TrackMage for more insights into innovative e-commerce strategies. #digitalmarketing #Entrepreneurship #advertisingandmarketing #sustainability #Ecommerce #BusinessGrowth

What got you here won't get you there. The strategies that brought you initial success are not the same ones that will propel you to the next level. To achieve sustainable growth, you must evolve your approach: (1) Ensure you have the right foundation - Craft a compelling brand identity - Develop a unique, differentiated message - Clearly communicate your value proposition (2) Invest in long-term growth channels - Build organic reach through SEO - Establish thought leadership with content - Cultivate strategic partnerships for scale (3) Balance your growth portfolio - 60% on proven revenue drivers - 30% on high-potential long-term plays - 10% on experimental growth bets (4) Optimize your core growth engine - Focus on increasing AOV and LTV - Prioritize retention and referral generation - Minimize churn and acquisition costs (5) Adopt an agile, data-driven mindset Continuously measure and analyze performance Rapidly test and iterate on new growth ideas Double down on what works, ditch what doesn't Escaping the early-stage growth trap requires a fundamental shift. A shift from short-term tactics to sustainable systems. From one-off wins to scalable, repeatable models. From gut-driven guesses to data-backed decisions. Are you ready to rewrite your growth playbook? It's time to graduate to the big leagues. Evolution is the only way forward.

Camels Are the New Unicorns for eCommerce & CPG 🐫🔥 The old way: → Scale at all costs, even when margins suffer → VCs support the lucky (well connected) few → Burn cash on paid ads without strategy → Hire fast, hope it works out later → Spray-and-pray marketing The new way: → Stay lean: mix FTEs with skilled freelancers → Build authentic communities around your brand → Test creative content strategies to grab attention → Blend automation with human touch for efficiency → Leverage AI for insights and streamlined operations → Host small, personal events that deepen relationships → Focus on partnerships and long-term ecosystem growth → Drive profitable growth—not just growth for growth’s sake → C-levels & founders building personal brands to connect directly with audiences Efficient and lean businesses are the ones surviving in eCommerce and CPG. The barriers to entry have never been lower, and the opportunities for genuine connection have never been higher. Camels are resilient. They: - Adapt to harsh environments. - Sprint when the opportunity strikes. - Sustain themselves during tough times. The camel mindset means prioritizing cash flow, profitability, and smart growth over chasing vanity metrics or unrealistic growth targets. What does this look like in practice for eCommerce and CPG founders? → Running your brand like a media company to attract and engage customers. → Focusing on sustainable, high-margin growth without investor pressure. → Building lasting relationships, not just short-term wins. As Entrepreneur Magazine put it: “Camels survive the harshest places by balancing strong growth with sustainability. They’re not mythical creatures—they’re real, resilient, and built to last.” The camel startup era is here—and it’s exactly what eCommerce and CPG brands need to thrive. If this resonates, follow me for more eCommerce and CPG insights. #eCommerce #CPGfounders #cashflow #profitablegrowth #startups