Episode Description
Jevon Le Roux was dropped into SurfStitch, then Australia's second largest pure play ecommerce retailer, as managing director with zero ecommerce experience. His job was to stabilise the business and make it profitable. There, and later at P.E Nation, he saw the same pattern: brands spend almost everything on winning the customer before checkout, and almost nothing on what happens after it.
The numbers behind that gap are big. One in five shoppers don't get what they ordered on time, as promised. In the US, that costs businesses an estimated $213 billion in revenue lost to competitors, plus $80 billion in customer service time spent fixing problems after the fact. Jevon estimates the combined hit at 1.5 to 2.5 points of EBITDA, which is a big share of a business that might only be running at 5 to 10%.
Jevon is now co-founder and CEO of Keeyu, a post-purchase intelligence platform that catches shipping and fulfilment problems before the customer finds out. In this episode, he and Nate talk about why help desks and post-purchase flows only react once something has gone wrong, why replacing churned customers with more ad spend doesn't add up, the EHP Labs case that returned around 8x, how Keeyu pivoted while almost out of runway, and two changes any founder can make this week without buying any software.
Key Takeaways
- Most post-purchase tools only react. Help desks, chatbots and tracking emails tell the customer something went wrong after it has already happened. None of them can fix it. A proactive approach spots the root cause, whether that's a sync failure, a stock-out, a failed label or a parcel stuck in customs, and resolves it before the customer ever complains.
- Post-purchase failures quietly cost EBITDA. Churned customers and the extra customer service time needed to fix problems add up to an estimated 1.5 to 2.5 points of EBITDA. For a brand running at 5 to 10% EBITDA, that's a material chunk of profit.
- You can't out-spend churn. If a customer has one bad experience, they leave and tell others about it, and no win-back flow brings them back. The acquisition cost and the lifetime value are both gone. As Jevon puts it, small losses every day add up the same way a daily coffee does.
- The payoff is biggest for repeat-purchase brands. Keeyu's typical customers have an average order value of around $80 to $120 and get two to three repeat purchases a year. At that level, losing 10 or 20 customers a day adds up fast.
- Customer service can become a profit center. At EHP Labs, the brand behind OxyShred, the team went from firefighting tickets all day to having positive conversations with customers. They tracked around an 8x return, with payback in just under two months.
- Two changes to make this week. First, hold a 15-minute stand-up with customer service every morning, because it's the pulse of the business. Second, merge customer service and ecommerce operations into one team and make them own everything that happens after the customer clicks buy.
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