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First visit
Reading language
You can read the course in one language and ask for explanations in another. We never guess your language from your name, religion, nationality or location.
Metrics: repurchase, cohort curve, service response.
A coupon is a price concession, not a relationship.
Ask students to define retention without using the word 'coupon'. Most will mention repeat purchase; push them to add a time window.
Concept 1 · Loop · 5 / 19
The retention loop
Point out that this is a loop: a recovered complaint can re-enter at personalised contact. A one-way funnel would hide that.
Concept 1 · Metrics · 6 / 19
Read the cohort, not the monthly average
1,000 January buyers: 18% repeat in month 1.
27% cumulative by month 2; 31% by month 3.
Period rate falls while cumulative rises.
Window must match the natural repurchase cycle.
Ask which number should go on the dashboard. Answer: both, clearly labelled, plus the cohort size and window.
Concept 2 · Service recovery · 7 / 19
Three moves after a failure
Ask what a slow reply plus a generic coupon does. It is a double deviation: the customer is disappointed twice.
Concept 2 · Coupon versus service · 8 / 19
A coupon buys a transaction; service earns the next one
Coupon
Immediate, easy to measure
Lowers margin on orders that would have happened
Trains customers to wait for discounts
Service recovery
Specific, slower to show
Protects the relationship after failure
Needs authority limits and a cause fix
This comparison is the case's core. A coupon can be part of recovery, but it cannot be the whole recovery.
Concept 3 · Email · 9 / 19
Email: strong relationships, weak acquisition
§3.3.4: opt-in audience only.
Click-through typically 3%-4%.
List 5-20 cents a name; postcard 75-80 cents.
Sending is nearly free; filters and list decay limit it.
Ask where email belongs in the funnel. Answer: after purchase, not at the top. The textbook's conclusion is explicit.
Concept 3 · Cost · 10 / 19
Email costs a fraction of a postcard per name
?How much does one contact name cost?Swipe horizontally to see the full figure
Takeaway
Postcards cost roughly 4–16 times email per name; the ranges depend on targeting and what is included.
The range top is 88 cents; the old slide's percentages were relative to that, not to a budget.
Actual dataUS cents per name · Textbook 2022 edition · SRC-003 §3.3.4
The share column is relative to 88 cents, the top of the range, not to a total budget. The ranges depend on targeting and on what the postcard includes.
Concept 4 · Affiliate · 11 / 19
Four players in affiliate marketing
Ask which player owns the relationship after the sale. Answer: the publisher. That is why affiliates acquire but do not retain.
Concept 4 · Commission · 12 / 19
Commission ranges and the margin test
Run the margin test on the board: 20% commission on a 30% gross margin leaves 10% before logistics and returns. On 15%, it is negative.
Case · Teaching case · 13 / 19
Two retention plans
1,000 first buyers a month, AOV US$40
Gross margin 35% = US$14 per order
Baseline 90-day repurchase 12%
A: 15% coupon; B: email, size guide, service standard
Which adds contribution?
Give one minute to predict. Most groups will pick A because the repurchase lift looks larger relative to its cost; the discount on baseline orders is the trap.
Case analysis · 14 / 19
The coupon plan loses money
Check the two effects separately: incremental orders and margin lost on orders that would have happened. This is the lesson's core arithmetic.
Common misconceptions · 15 / 19
Five claims to retire
Retention means coupons.
Email acquires at scale.
Affiliate equals distribution.
Private traffic is free.
Good reviews prove retention.
For each, ask which metric or cost it confuses. The review claim is the most common in student marketing plans.
Classroom activity · 16 / 19
Design a recovery and retention plan
If a group reports only incremental orders, send them back to subtract the discount on the baseline. Require a number for the cap.
Self-check · 17 / 19
Five questions
Q1 retention goal · Q2 email role
Q3 affiliate players · Q4 list cost
Q5 service recovery
Q5 is the applied question; if it is missed, replay the three-move slide before the case debrief.
Summary · 18 / 19
What you can now do
Measure retention with a cohort.
Place email after purchase, not at the top.
Test affiliate commission against margin.
Run apology, compensation and root-cause fix.
Return to the opening brand question and ask which retention mechanism explains it.
Sources & next · 19 / 19
Sources and preparation
Textbook §3.1.2–3.1.2.2; §3.3.4–3.3.5; §3.1.1.
Cost figures are from the textbook's 2022 edition.
Next: assortment, long tail and product strategy.
Remind students that the case's baseline and cost figures are simulations, not benchmarks.