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

Once again, we'll be covering the key challenges and strategies for each growth phase. In the first installment, we covered the launch stage. This second installment focuses on the growth stage.

As before, we divide growth phases into three stages: launch, growth, and expansion. And as before, the revenue target for the launch stage may be ¥10 million per month or ¥100 million — the actual figures vary depending on your product and market size, so please adapt the concepts to fit your own market.

In the growth stage, your customer base expands and the accuracy of your data analysis improves. The key is to break down budget-vs-actual variances by channel, product, customer, and page/content, identify issues, execute initiatives, and keep cycling through continuous improvement to drive expansion.

Among the challenges that become critical during the growth stage, this article covers the following three:

• Build a CRM operation that lets you forecast revenue
• Maximize revenue from your winning ads
• Accelerate referral sales

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Build a CRM Operation That Lets You Forecast Revenue

Up to around ¥100 million in annual revenue, most businesses are fully occupied with securing immediate sales. But by the time you surpass that mark, you should have built up a substantial customer list.

With a large enough customer list, you can consistently generate 20–30% of your revenue through CRM. CRM-driven revenue is easier to control than revenue from advertising or social media. By building a solid CRM operation, you can reduce the uncertainty in your business planning.

To define your operations, calculate the projected value per email send based on past performance, then decide how many emails of each type to send per month. Use those rules as the basis for your delivery schedule.

When gaps arise between targets and actuals, examine results by email type (broadcast emails, emails for non-purchasers, emails for existing customers, etc.), by product, and by customer type (new vs. returning, gender, etc.) to identify root causes and determine your next actions.

The chart below shows email-driven revenue for a hypothetical apparel store, broken down by product type. We initially thought email revenue had declined recently — and indeed, jacket sales had dropped. But on closer inspection, pants sales had actually increased. If jacket sales fell despite a concerted promotional push, it may be worth revisiting the jacket messaging.

If breaking down by product type alone isn't enough to pinpoint the issue, try combining it with additional dimensions such as customer type (new vs. returning) or landing page to narrow down the problem.

When executing your initiatives, consider using Shopify-dedicated CRM apps such as Klaviyo, Omnisend, or Dotdigital. Shopify Email is affordable and can handle the basics, but setting up UTM parameters is cumbersome, measurement is limited, and in its current state it falls short of enabling the kind of revenue-forecasting CRM operation we're describing here.

We've previously written introductory articles on using Klaviyo, so feel free to reference them.

Maximize Revenue from Your Winning Ads

During the growth stage, you also focus on maximizing revenue from the profitable ads you discovered in the launch stage. Even well-performing ads often have room to grow further, so make sure to fully maximize them.

With Meta ads, even when a specific message-and-LP combination is generating profit, drilling down further often reveals that certain audiences or placements aren't delivering as much revenue as expected.

For example, Feed and Stories placements might show strong profit performance, while Reels and Explore underperform. In that case, finding creatives suited to Reels and Explore can unlock additional revenue from the same ad-and-message combination you originally discovered.

From experience, Meta ads can often be pushed even further once you're able to tailor ad creatives and LP management to specific conditions such as audience, placement, and seasonality.

For Google Ads as well, analyze the search terms, audiences, and placements of your profitable campaigns, identify areas for improvement, and optimize your bids, keywords, audiences, and ad creatives accordingly.

Both Google Ads and Meta Ads require situation-dependent management. To make sound decisions, we recommend building a logic tree tailored to your own business — based on general advertising logic trees — so your team can consistently apply the right approach.

For example, if increasing traffic volume from Google Ads is the challenge, break it down into more granular sub-issues and define specific action patterns for each. As you continue operating, the logic tree will naturally become more and more optimized to your store.

From the growth stage onward, both CRM and advertising operations become increasingly granular. As operations grow more detailed, they tend to become a black box held by specific team members. By sharing the data, discussion points, tasks, and performance validation results required for your operations, your team can collaborate more effectively.

For reference, at our company we use StoreHero — our growth platform — to consolidate data, discussions, and tasks and manage growth projects.

Accelerate Referral Sales

If you've built a core fan base during the launch stage, you may already have customers bringing in other customers. However, organically generated referral revenue is often less than 5% of total sales.

Building a fan base is inherently valuable, but to surpass ¥500 million in annual revenue, you'll need to go beyond organic referrals and actively grow the number of people selling your products through incentive-based programs.

Specific tactics include affiliate programs, referral programs, ambassador programs, collaborations, and wholesale/retail channel development. The right mix of tactics varies by industry and product — some industries have strong affiliate ecosystems, while some products lend themselves more naturally to brand or creator collaborations.

For referral sales initiatives as well, manage your KPIs carefully and continuously improve based on budget-vs-actual variances. Take action based on whether the bottleneck is a lack of sellers or insufficient revenue per seller.

For affiliate programs, for example, track the total number of media outlets, the number of active media outlets (those generating sales), and revenue per media outlet. If media profitability is declining, examine which outlets are underperforming and propose improvement initiatives to them.

Even when incentives are involved, relationship-building remains important. Some merchants invest heavily in building relationships by hosting study sessions for affiliates and ambassadors, or by holding offline events.

On Shopify, you can use apps like Goaffpro or Shopify Collabs to build your own proprietary affiliate program. For wholesale expansion, B2B Wholesale Club or the Shopify Plus wholesale channel can provide the functionality you need.

Driving Thorough Growth Execution with StoreHero

StoreHero supports merchants who are struggling to grow their Shopify sales with thorough, hands-on execution of growth initiatives.

Leveraging the StoreHero growth platform, we help merchants achieve sustained growth through highly granular operations — far beyond what manual processes can deliver — and through the large-scale execution of advertising, storefront, CRM, and inventory management initiatives.

We are currently offering free store diagnostics. If you have challenges with Shopify growth initiatives in general, please don't hesitate to contact us. Learn more about our free store diagnostic here

Summary

We've covered three key challenges during the growth stage and the strategies to address them: "Build a CRM operation that lets you forecast revenue," "Maximize revenue from your winning ads," and "Accelerate referral sales." All three are critical themes during the growth stage. Address them seriously and move forward to the next phase: expansion.

StoreHero can support you from the very foundation of building a successful store. Feel free to reach out. =>View StoreHero's service introduction materials