How to use the Pareto Principle to build your DTC Brand
What’s the 80/20 of Ecommerce?
We’ve all heard of the Pareto principle applied to business …
“80% of your revenue comes from 20% of your customer”
But does it really hold true for your brand?
You see, if you are building a real brand
Retaining and cherishing your existing customers should be your number one priority
Because your “VIP” customers (the top 10%) are probably accounting for more than 50% of your revenue…
If you’ve read any books on the 80/20 rule, you know the math holds true
The top 10% are always your most valuable customers
Not only do they spend the most money, but they also come back and buy over and over again… and they also promote your business for free if they love your brand
So how do you make sure, as the business owner to create and retain more of these customers?
Here in this post, I’m going to show you exactly how your brand can use an automated “VIP” email sequence to transform your average customer into a “VIP” customer
In hindsight, by implementing this flow you will make more money from your current customers, increasing their LTV, increasing their AOV…
But ultimately achieve something that is truly priceless: Building a stronger community.
This will also set you apart from the boring brands that send the same automated sequence, even when people buy from them multiples times in a row…
What you want to do, is give them a true and lasting experience…
So without further due, let’s get right into the flow:
Here is what you should do:
You should segment people who bought from you at least x2 in the past
Then you send them the following flow :
Email 1 :
Instead of sending a boring confirmation email, the first email should be where you congratulate them, let them how important they are to your business, go over the top to make them laugh, this is where you should inject as much personality as possible. Don’t be afraid to show them a little bit of appreciation.
You also have to let them know that they are a “VIP” customer, meaning that they will have access to more discounts, new products, upcoming launches, VIP behind-the-scenes content…
Trust me it truly makes a difference
You want to end this email by asking them to fill out a form about your brand, going over what they want to see more of, what products do they like, what brands were they considering before buying from you….
This way you gather some crucial feedback from people who care about your brand
Email 2 (2 days later) :
This email should be focused on increasing their LTV.
What you want to do is, focus the email on one of your products that complements a best seller.
Chances are, they’ve already bought your best-selling product, multiples times and they love it.
Because you know they like your brand, you can upsell them other products being way more "aggressive"
By "aggressive" I mean : educating them about your product and then letting them understand that the missing piece between their current situation ( where they are now) and their perfect situation ( where they want to be) is the product you are selling
Because they trust your brand, it’s an easy sell.
Email 3 (3 days later) :
This email should also be focused on increasing their LTV
You see, if your product is something you can consume, you want to sell them a package delivered to their door, every week, month….
This way, as the business owner, the more people get on this monthly package the more steady cash flow you get for your brand.
It’s also better for the consumer, simply because they won’t have to go to your store every time they need to buy your stuff
Email 4 (5 days later) :
This email should focus on getting more high quality and genuine reviews for your brand
Listen, these people love your brand and any reviews you can get from them will be stellar
Most people ask for written reviews but videos reviews truly make a world of difference and can be used as User Generated Ad Creatives
But how do you ask them for a review?
There is 2 ways you can go about asking for a review:
Ask them for a video review in exchange for a discount code
By doing a give-away and the only way to participate is to send them a video review
