One question to guide 99% of your business decisions

One of the biggest factors in whether a business succeeds or fails is knowing where to focus your effort.

If your business obeys the laws of physics (as most do), you’re working with a finite set of resources:

Time. Attention. Energy.

There’s always another campaign to run. Another channel to test. Another idea that feels like it should be worked on.

Try to do everything, and you usually end up doing nothing particularly well.

When I’m unsure where to focus, I come back to one simple question:

Does this compound?

You can put $1 in and get $1.50 out, then do the same thing again tomorrow. That works - but every day, you’re starting from zero.

Or you can put $1 in and get $1.25 back the first day, $1.50 the next, $2 the day after that.

Early returns look smaller. But over time, the difference becomes impossible to ignore.

That’s a better way to spend finite resources: on work that keeps delivering value after the initial effort is done.

This idea applies to life, to investments, and it’s just as true for ecommerce.

Timing the market vs time in the market

In investing, there’s a well-worn idea that most people underperform not because they pick the wrong assets, but because they try to time the market.

They jump in when things look promising, then they jump out when results dip. They’re all about trying to catch the right stock at the right moment.

Meanwhile, people like Warren Buffett win by doing something much less exciting: letting compounding work over time.

This isn’t an investing newsletter, but the principle shows up everywhere.

You see the same pattern in ecommerce.

Some brands chase the hot channel or the next quick win. Others stay invested in areas that get stronger the longer they work on them.

What compounding actually looks like

Compounding isn’t dramatic.

It rarely shows up as a sudden spike, a record sales day, or a flood of new customers. Early on, it can feel slow. It can feel boring. It can even feel like you’re wasting your time.

Then a year later, you look back and see the gap between where you were and where you are now.

If this still sounds vague, fair enough. Let’s make it more concrete. These are some of the parts of an ecommerce business that tend to compound.

1. Audience building

Your email list. SMS subscribers. App users. Push subscribers.

The bigger your audience, and especially the more of it you own, the more leverage you have.

Every new person you can reach directly makes future communication easier:

• Launches don’t start from zero

• Segmentation improves

• Marginal cost drops

You’re building reach that stays with you.

2. Retention

Anything that increases the chance a customer comes back.

Small gains here matter more than they look. Repeat purchases mean higher margins, more predictable revenue - and each repeat purchase makes that customer more likely to come back and buy again too.

Over time, this quietly changes the economics of your business.

3. Understanding your customers

Knowing why people buy, why they don’t, and why they leave.

Each insight compounds into better decisions elsewhere: messaging, offers, product positioning, even support.

Over time, fewer decisions are guesses, more are informed.

4. Product and merchandising

What you sell, what you restock, and what you quietly stop pushing.

Better products reduce the need for persuasion. Fewer weak SKUs mean clearer stories, higher conversion, and less reliance on discounts.

Your catalog itself becomes an asset.

5. Brand

How predictable and recognizable your business feels to customers.

This builds slowly, then starts doing a surprising amount of work. Customers convert faster. They hesitate less. They’re more forgiving when things go wrong.

6. Trust

Trust is one of the strongest compounding assets in a business.

You can’t create it instantly. You earn it by showing up consistently, delivering what you promise, and not burning customers for short-term wins.

But it’s 100% worth it (and it’s going to become an increasingly bigger deal with AI flooding everyone’s feeds).

What doesn’t compound

1. One-off campaigns

Standalone launches, isolated promos, anything built to perform once.

They can work. Sometimes they work very well. But each one starts from zero, and once it’s over, there’s nothing left to build on.

2. Paid ads

Controversial, maybe. But paid ads only work as long as you keep feeding the machine.

They can deliver compounding growth if you have a strong retention system, but many brands don’t, and for them paid campaigns are a treadmill.

3. Manual processes

Workflows that rely on constant human effort to function.

They keep things moving, but they don’t get smarter over time. Scale usually means more work, not better results.

4. Channel hopping

Jumping from one platform or tactic to the next based on short-term performance.

Early gains often come from novelty, not mastery. Switching too quickly resets learning and prevents anything from compounding.

5. Launch-only thinking

Big upfront pushes with little follow-through.

Without iteration, feedback, and repetition, the value peaks early and fades fast.

None of this means these things shouldn’t exist. Most businesses need them at various points. The problem is when too much time and energy goes into work that resets every cycle.

Turning one-offs into compounding

A project or a campaign can still be a positive return on your time, even if it’s just a one-off.

And you need some things with immediate payoff, to keep the lights on.

But as a rule of thumb - try to steer your attention towards things that compound; or look at things through a compounding lens.

A launch, for example, can be a one-off spike or a momentum builder, depending how you approach it.

100% true for promotions as well. Many brands focus on immediate returns, that’s it. You end up with a sales spike, celebrations and champagne emojis in Slack, then back to baseline next week.

Or you can build your promotions with a long-term view. How can we run a promo that gives us a short-term boost, but also brings compounding value?

App-exclusives are great for this. You get an initial boost, plus the compounding gains of more people downloading your app (a closer touchpoint, native push notifications).

The business impact

When you install compounding as a key principle in your business, everything changes.

Growth doesn’t feel like pushing a boulder uphill anymore. It doesn’t feel like you need to keep pushing or the whole system will fall down.

Progress becomes quieter. There may be fewer dramatic spikes. But it’s more durable. And over time, it turns your business into something that’s built to last.

The Compounding Asset Every Brand Needs

The ultimate asset for compounding growth? A mobile app.

It’s a direct connection to your best customers; one that gets people shopping more, shopping for longer, and strengthens loyalty bonds. You rely less on algorithms and paid ads, and start to really control your customer relationships.

MobiLoud turns your existing site into an app, with no rebuilding, nearly no work to maintain, and full feature parity with your website. It’s the best way for ecommerce brands to launch their own mobile app.

Click here to get a free preview of your app

Quick Hits

ChatGPT to Take 4% Cut on Instant Checkout Sales

Major news just dropped. Shopify Merchants will pay OpenAI a 4% commission on sales made through their Instant Checkout feature.

Your products show up either way, but the question is whether eliminating the friction of clicking through to your site is worth 4% of revenue. OpenAI is betting that seamless, one-click purchasing justifies the premium.

Read more →

Copilot Checkout

Meanwhile, Microsoft Copilot has launched its own native checkout feature in the US. It enables AI-powered purchases through PayPal, Shopify, and Stripe partnerships, with brands such as Urban Outfitters, Anthropologie, Ashley Furniture, and Etsy attached for launch.

Read more →

Is 2026 the Year of Zero-Click Buying?

AI agents like Amazon's Rufus and Walmart's Sparky are poised to transform retail this year. The big shift: "zero-click buying" where customers purchase without ever hitting a buy button or leaving their chat app.

EMarketer projects AI-driven ecommerce will reach 1.5% of total online sales in 2026, and Gartner calls this year a "hockey stick year" for adoption. Yet current integrations are still buggy, and now with a cost associated to ChatGPT checkouts, we might not see reality match hype just yet.

Read more →

Features vs Status

If you’re building your ads around features (or even benefits), you may not be looking deep enough.

Most people don’t care about features, they care about status. Not just benefits - but the benefit of the benefit.

Read more →

The Most Overlooked Number in Your Biz

Revenue, ROAS, CAC, profit margins, incremental lift… they make for nice dashboard reading, but the CEO of Lomi and Pela Case reminds us of the most important number most people don’t pay enough attention to.

That’s all for now.

I’ll be back in touch next week, with more on how successful brands are doing CX and retention right.

If there’s any topic you’d like to see us dive into, for either the newsletter or the podcast, just shoot me a message here.

Until next time,

Pietro and The Retention Edge Team

PS: want to boost retention, revenue and profitability? If so, launching your own app could be the best move you make this year.

See how: go to our website to get a preview of your app for free, or shoot me a DM on LinkedIn to talk about it.