Situation

HelloPets’ Customer Lifetime Value (CLTV) was not improving year over year. At the same time, Customer Acquisition Costs (CAC) were steadily increasing. 

This created growing pressure on long-term profitability and put the overall business model at risk.

Complication

Without improving retention, higher CACs would continue to erode margins. However, HelloPets lacked clarity on which specific order sequence had the greatest impact on CLTV, making it difficult to take targeted action.

Using the Kickbite retention report, HelloPets analyzed reorder behavior and identified the order sequence with the lowest reordering probability. The data revealed the biggest drop-off occurred between the second and third purchase. After the third order, churn significantly decreased and customers showed strong loyalty behavior.

Solution

Hellopets focused its retention strategy specifically on increasing the transition from the second to the third order.

Leveraging Kickbite’s insights on the optimal timing between the order sequences, key actions included:

Launching a dynamic email flow targeting second-time buyers, combining:

1. Feedback emails

2. Educational/content emails

3. Incentive/offer emails

Having customer service proactively call second-time buyers after 180 days (the average time between orders retrieved from the Kickbite data) to:

1. Collect product feedback

2. Recommend additional products

Result

By concentrating efforts on improving the second-to-third purchase transition, Hellopets increased the third purchase reorder rate.

This led to a 15% improvement in CLTV within a 12-month reorder window for the targeted cohorts, significantly strengthening long-term profitability despite rising CACs.

Due to increased CLTV HelloPets achieved 45% YoY Growth rates in 2023.