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[MUSIC PLAYING] There's a great article by Andy Dunn, Founder of Bonobos called "E-commerce is a Bear." We link to it in the notes for this lesson and encouraged you to read it earlier in the course. In the article, Dunn argues that e-commerce is hard, because it doesn't scale well. You pay a lot to acquire new customers. So you don't make margin on the initial order. And as 80% of your orders are from one and done customers, F1s, 80% of your orders aren't really generating cash flow.
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So what's the solution? As we mentioned in a previous lesson, it's getting a second order, turning an F1 into an F2. Because repeat orders have a lower cost of acquisition, they generate cash flow. My favorite lifecycle campaign to generate that second order is called a bounce back campaign. In this lesson, I show you the one we use to Karmaloop. Bounce back campaigns are an old brick and mortar retail concept.
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You go into a J Crew and buy a shirt. And they give you an immediate offer on a product in another category that you did not buy from like pants. The campaigns work for three reasons. Number one-- a customer's recently placed an order. She's an R0 F1. So she's in buy mode. And you're just asking her to add on a little something. Number two-- the most read email is the order received. So you can work your bounce back right into that email using the approach we discussed in module 3.
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Number three-- most customers have no idea as to the breadth of your product offering. They come into buy socks and buy the socks. They have no idea you carry t-shirts until they get that bounce back featuring the t-shirts. At Karmaloop, I developed a simple one email bounce back campaign that you can download in the lesson notes. You might take a look at that now. I want to highlight a couple aspects of that email. First-- I chose a basic high margin, low priced product t-shirts, because I knew there would be a good impulse buy.
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What are your impulse buys? Second-- I added some urgency to my promotion by the use of that clock in the long coupon code. This was perceived urgency as I didn't actually have the time to figure out how to expire a coupon. Third-- I targeted my F1 segment we discussed before. In [INAUDIBLE],, I carved out an R0 F1 segment, in other words, my one time buyers who just bought today. And I automated this campaign to run to them.
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Put these three together and this campaign killed. I set it up in about an hour. And it generated over a million in revenue over the following year. I can't guarantee the same results for you. But it's fun to test out. And it's a fantastic way to generate more profitable second purchases. [MUSIC PLAYING]
