Shopify × Growth: Key Challenges by Growth Phase — Expansion Stage

In this installment, we continue our series on key challenges and strategies for each growth phase of Shopify × growth operations. The first article covered the launch stage and the second covered the growth stage — this third article focuses on the expansion stage.

The expansion stage is the phase where you are expected to maintain momentum and keep growing, building on the customer base established during the growth stage. This article covers the following three challenges that commonly arise during the expansion stage:

• Segmented CRM operations
• Loyal customer initiatives
• Two-step marketing

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Segmented CRM Operations

As the frequency of email and LINE messages increases, performance per message tends to decline. During the expansion stage, segmented operations become essential for maintaining Revenue per Session while increasing delivery frequency.

In the expansion stage, you have a large customer list, so even with fine-grained segmentation you can still maintain a sufficient number of customers within each segment — which means the benefits of segmentation are significant.

The table below is a simplified example. It simulates which sending frequency — weekly 1, 3, or 5 times — generates the highest revenue when Revenue per Session and CTR (Click-Through Rate) decline as email frequency increases. In this example, sending 3 times per week outperforms sending 5 times per week, demonstrating that indiscriminate sending can hurt performance.

The next example shows a case where segmenting customers and delivering tailored emails improved CTR and Revenue per Session. In this scenario, sending 5 times per week produced the highest revenue. While this is a contrived simulation, the results are not entirely unrealistic — the higher the sending frequency, the greater the potential impact of segmentation.

Performance monitoring is also critical for segmented CRM operations. Continuously monitor performance by segment, and when changes occur, implement improvements as needed to fine-tune your operations.

Simply knowing whether revenue went up or down makes it difficult to decide what action to take. However, if you understand what changes are happening in best-selling products or buyer demographics, it becomes much easier to identify high-confidence actions.

The chart below shows an example of email-attributed revenue trends broken down by age group (using fictional data). Revenue regularly spikes among customers in their 30s, but recently sales among customers in their 40s and 50s have also been growing. On the other hand, revenue from customers in their 20s has not grown much. This suggests that recent messaging is not resonating with younger audiences. A good approach would be to continue the current messaging for customers 30 and above, while testing a different angle for the 20s segment.

For segmented CRM operations on Shopify, email tools commonly used include Klaviyo, Omnisend, and Dotdigital, while for LINE messaging, CRM PLUS on LINE is widely used.

We have previously written articles on how to use Klaviyo — please feel free to refer to them.

When delivering highly personalized emails and LINE messages tailored to individual customers, the operational workload increases significantly. It is therefore important to build easy-to-use templates and workflows. It is also essential to collect customer information through surveys, chat, and other channels so that you can create effective segments.

Loyal Customer Initiatives

At StoreHero, we refer to initiatives aimed at growing and retaining customers with high purchase frequency and high average order value as "loyal customer initiatives." As the number of loyal customers grows, it becomes easier to sustain continuous growth.

Before diving into loyal customer initiatives, start by understanding your current customer composition. Rank customers by purchase amount and purchase frequency, then aggregate purchasing behavior for each rank.

The table below uses fictional data, showing an aggregation sheet where customers are ranked by annual purchase amount: under ¥50,000, under ¥100,000, under ¥300,000, under ¥500,000, and ¥500,000 and above.

In this example, purchase frequency increases as customers move from Rank E up through D and C. Meanwhile, average order value also gradually increases from Rank E to C, but not as dramatically as purchase frequency.

Based on these characteristics, it appears that initiatives focused on increasing purchase frequency would be more effective than those focused on increasing order value when trying to move Rank D customers up to Rank C.

The total of all purchase amounts equals the store's overall revenue, so you can set customer count targets for each rank by working backward from your revenue goals, and then pursue loyal customer initiatives in light of the purchasing trends described above.

Loyal customer initiatives encompass many approaches beyond email and LINE communication, including loyalty programs (membership tiers, points, etc.), mobile app operations, members-only products and events, and personalized customer service.

When implementing loyal customer initiatives on Shopify, you can leverage VIP for loyalty programs, Appify for native app operations, and Channel Talk, Gorgias, or Tolstoy for personalized customer service.

To evaluate the effectiveness of these initiatives, track LTV (Lifetime Value) growth. For example, you can measure effectiveness by comparing the LTV of customers who used points or the app versus those who did not, among cohorts who made their first purchase in the same month.

Two-Step Marketing

During the expansion stage, CRM-driven revenue grows substantially, but relying too heavily on CRM means new customer acquisition stagnates and overall growth stalls — making new customer acquisition an ongoing priority.

By the growth stage, your advertising operations are well-optimized with refined management. Simply expanding ad reach while maintaining current profitability is not straightforward.

The solution is to broaden your targeting to reach customers with more latent demand than before, while finding ways to maintain profitability. Two-step marketing is a powerful tool for achieving this.

In two-step marketing, rather than immediately targeting sales with ads, the first step is to acquire low-barrier conversions at a low CPA (Cost Per Acquisition) — such as free or low-cost products, or email/LINE sign-ups. You then nurture these prospects and communicate your product's value to drive purchases.

In two-step marketing, the key metrics to monitor are the initial registration CPA and the lift-through rate.

The example below shows a tracking sheet designed for two-step marketing, where ads are used to acquire leads (such as email sign-ups), and email nurturing guides them toward a purchase. The lift-through rate after lead acquisition (number of buyers / number of leads) is broken down into: buyers / clicks, clicks / opens, and opens / leads for ongoing monitoring.

By breaking it down this way, you can see that the actual lift-through rate of 4.5% falls short of the 5.0% target, and that clicks / opens at 35.0% is significantly behind the 50.0% target. This makes it clear that improving email content to increase clicks is the right area to focus on. Tracking all the metrics required for two-step marketing takes effort, as it involves aggregating data from multiple tools — but it is necessary for achieving consistent results.

Two-step marketing is about acquiring a broad pool of customers with latent demand at a low cost, then monetizing them through high-quality nurturing. A variation of this approach involves driving Instagram or Twitter followers to email or LINE sign-ups without paid ads, and then encouraging purchases through nurturing.

Mastering two-step marketing to achieve broad customer acquisition will enable even further growth.

Driving Growth Operations with StoreHero

StoreHero supports merchants on Shopify who are looking to increase sales by helping them execute growth initiatives thoroughly.

Leveraging the StoreHero growth platform, we provide support for continuous growth through granular operations that manual management cannot achieve, as well as large-scale initiative execution — spanning advertising, storefront, CRM, and inventory management.

We are currently offering free store diagnostics. If you have challenges related to Shopify × growth initiatives broadly, please feel free to contact us. Learn more about our free store diagnostic here

Summary

We covered three key challenges for the expansion stage — the culmination of your own-brand e-commerce growth journey. For each challenge, we also introduced how to monitor performance, how to make strategic decisions, and which Shopify apps can be used to execute initiatives.

For sustained growth, it is essential to implement the right initiatives for your current growth phase and to shift your key initiatives, monitoring metrics, and operations as you transition between phases. It also requires monitoring your metrics, making fast, on-the-ground decisions based on current conditions, and following through until you see results.

StoreHero supports commerce businesses on Shopify by leveraging our growth platform to help execute data-driven, high-confidence initiatives. Whether you are in the launch stage or the growth stage, Shopify × growth is our specialty — so if you would like to work together, please do not hesitate to reach out.

StoreHero can support you from the ground up, including store design. Feel free to get in touch. =>View StoreHero's Service Introduction Materials