How Chubbies increased customer lifetime value by 100% with returns

If you're looking for ways to increase the lifetime value of customers, Chubbies is one brand that has it all figured out. Founded in 2011, Chubbies has built a business selling clothing & content for the Friday at 5:00 feeling. Their brand is celebrated. Their customers are feverous. But some of their biggest LTV gains have come from an unlikely place: returns.

Chubbies learned early on that one of the best ways to increase customer lifetime value was centered around customer experience in the post-purchase journey. The champion of this movement wasn't a marketing person - it was the CFO, Dave Wardell. He's not your typical finance guy, but Chubbies isn't the typical clothing brand either. When we asked him to share his story, it didn't take much convincing.

Problem: Take returns from a cost center into a profit center.

Solution: Create a strategy to increase customer lifetime value with the Loop Returns platform & customer experience mastery.

Key Loop features: On-Demand Returns Portal, Shop Now/On Store, Bonus Credit.

Results

• 🚀 Customer lifetime value increased by over 100% in customers who returned products vs those who did not.

• ☄️ Exchanges gave Chubbies an additional 10% boost in LTV over refunds.

• ⚡️ Rate of upsell per return transaction increased by 100%.

Wondering how Loop can help redefine returns for your brand? Book a demo with our team today.

Want to increase CLV? Evolve your mindset first

Customer lifetime value (LTV or CLV depending on who you ask) refers to the total 'value' a customer has to the business over their relationship. Wondering how to increase customer lifetime value and boost profits? Chubbies is one brand that has done exactly that.

If you're after an increased CLV in ecommerce, chances are you've already put the usual suspects into action. Traditionally, that means the following:

• Digital marketing

• Email marketing

• Cross-selling

• Loyalty programs

• Social media

• Content marketing

Truly these all can work wonders when put to work in tandem towards the goal of increased CLV.

But if you're on the hunt for big wins, sometimes you'll find them where you least expect.

"As a finance guy, you often get a bad rap for being a no-person."

That's Dave Wardell, CFO of Chubbies. He moved into the role after coming from accounting firm PwC. At Chubbies, Dave has been saying 'yes' to something that brands often shy away from: investing in the returns touchpoint.

And as Dave will tell you, it took some evolution for him to get there.

"Before, there wasn't a way to think of returns as anything but a cost center. We had a prepaid return label, they would ship it back, and if they wanted to exchange it for something they would write it on a piece of paper... half of the time we couldn't even read it!"

That alone sounds like a nightmare. And sure, there's money to be saved by automating returns & relieving your customer service team - but that's only the beginning.

"If you're a digitally native brand, you need to be thinking about lifetime value, how you measure it, and returns are just a part of that. If you don't take that lifetime relationship into account, you're missing the entire picture."

Considering how much customer acquisition costs are on the rise, a long-term strategy focused on existing customers could be the difference-maker for modern ecom brands.

By improving the customer experience at the returns touchpoint, you can do more than reduce churn. You can win customers for life.

"Finding Loop helped us to start thinking about returns differently. We've evolved how we think about returns in general. We try to take a holistic approach to it around merchandising, the operations side of things, and customer experience... I think what opens that up is software like Loop that helps you to manage that customer experience in a different way."

Customer-focused returns process increased LTV 100%

Changing your mindset is one thing, but an enlightened state doesn't mean much without results. With their LTV-centric customer retention strategy, Chubbies has put up some big numbers.

"In terms of LTV, we see a stark difference between customers who have returned something versus not. We see well over 100% higher LTV on customers who have done returns vs not. At the very least, your most valuable customers are doing returns."

With a few Loop-only features, Dave was able to build the returns experience needed to send CLV through the roof. It’s all about building an exchange-optimized flow designed to keep customers happy and in the system.

Speaking of exchanges, Dave says the picture gets even brighter when customers choose exchanges over refunds. It turns out that giving people a choice can turn them into loyal customers real quick.

"And it's looking like exchanges give us an additional 10% boost in LTV over refunds, which makes sense because you're keeping sales in-house. Not only that but the rate of upsell per return transaction... we saw that rate increase by 100%. Likely means $200k of incremental revenue for us this year. So cool!"

Chubbies is seeing major success by focusing on the returns touchpoint. But it's not only them. We pulled returns data from hundreds of thousands of orders from over 500 brands and found that customers who return or exchange products are up to 46% more likely to make another purchase.

Acquiring new customers is hard enough. With a focus on the returns touchpoint with software by Loop, Chubbies has achieved huge results.

It's all about preventing post-purchase dissonance and enriching the customer experience. Paired with a strong brand, the average customer is bound to stick around a lot longer.

So how did Chubbies actually do it? A strong strategy & a little help from the Loop Returns platform.

How Loop increased customer LTV for Chubbies

Strategically, Chubbies wants everything they do to feed into profits. It's ecommerce, so that's a natural fit.

To achieve this, they focused on reducing net-zero customers - as Dave points out, these customers are actually more like net-negative customers due to acquisition & shipping costs.

The ultimate solution

Use Loop to build an exchange-first returns flow, designed to keep customers in the system.

Loop allows brands to create a returns flow that prioritizes exchanges over refunds. By doing that, they've automatically flipped LTV from negative to positive.

🚀 Key Loop features for Chubbies CLV rocketship:

1. On-Demand Returns Portal

2. Bonus Credit

3. Shop Now/On Store

1. On-Demand Returns Portal

With an 'always-on' returns portal, Chubbies is able to handle returns easily. Through returns automation, collecting valuable return reasons data is easy.

Reduced back and forth frees up huge swaths of time for customer service teams too. Lower costs on returns + happier customers leads to higher profits.

2. Bonus Credit

Through the use of bonus credit, Chubbies is able to push customers toward the ultimate win-win. Customers get free money to use toward their exchange purchase, and Chubbies gets to retain revenue while increasing customer LTV.

3. Shop Now/On Store

With the Loop-only Shop Now feature, customers can apply the value of their current return order to get any other products they want. It all happens with a push of a button straight from the returns portal.

Once a customer chooses the Shop Now option, the experience feels just like shopping - they are taken to the Chubbies site with a floating bar overlay telling them exactly how much credit they have to spend on their exchange order.

Ready to fly?

Bold prediction: finance guys like Dave will soon become the new normal. If his journey with Chubbies has proven anything, it’s that returns can easily be turned into a profit center. As a CFO, he's focused on profits. He's just achieving those goals by doing more than cost-cutting.

Chubbies is one of the strongest brands to appear in the last decade. Their absolute devotion to the customer experience - through returns & beyond - has paid off. And there's no reason it can't pay off for your brand too.

Book a demo with our team today. We're prepared to talk numbers - let's do it!

P.S. Want more insight into the Chubbies + Loop story? Check out this article & this podcast!