How Alchemy Worx Built a Retention-First Growth Engine That Fueled a $10B Brand
In an industry obsessed with what’s new, the e.l.f. Cosmetics story is a reminder that the most powerful growth strategies don’t expire. Nearly 20 years ago, Alchemy Worx partnered with e.l.f., a relationship that spanned from 2007 to 2018. Over the course of that 11-year partnership, retention-first principles transformed early growth into billion-dollar results through predictive analytics, disciplined CRM strategy, and audience-based frequency management—bypassing traditional media and helping build one of the world’s most successful digital-first beauty brands.
The Challenge
When Alchemy Worx first partnered with e.l.f. Cosmetics, the brand was an emerging disruptor generating approximately $5 million in annual revenue. Digital accounted for roughly half of that total, and early acquisition momentum was strong.
However, only 10–15% of revenue came from returning customers.
The products were beloved, but customer relationships were not yet compounding. This was not a product problem. It was a communication and retention opportunity.
“If the product is great but it’s not bringing people back, the fault isn’t with the product. It’s with communication.”
— Allan Levy, CEO, Alchemy Worx
At the time, e.l.f.’s email program reflected the realities of a fast-growing brand. While the audience size was meaningful, the CRM foundation had not yet matured to support scalable retention. Measurement frameworks were still evolving, campaigns were executed tactically, and messaging cadence was applied broadly rather than informed by individual customer behavior.
The Strategy
Alchemy Worx did not simply optimize email performance. We designed and implemented a scalable retention system built to grow alongside the business.
The work centered on three core pillars.
1. Designing a Consistent Campaign Framework
We replaced sporadic sends with a predictable, structured campaign cadence that balanced value, engagement, and conversion.
Rather than sending isolated promotions, we introduced a repeatable weekly rhythm built around two promotional cycles:
- One three-day promotion
- One four-day promotion
Within each promotional cycle, content and commerce worked together.
A typical seven-day framework included:
- Promotional launch and continuation
- Educational and lifestyle content that delivered value beyond the offer
- Instructional “get the look” product storytelling
- Strategic urgency moments, such as last-chance messaging and flash sales
- Competitive comparison content that reinforced e.l.f.’s value proposition
This structure accomplished two critical objectives:
- It ensured e.l.f. maintained a consistent, top-of-mind presence with its audience
- It led with value and education, not just discounts
The result was a predictable, measurable campaign system that could be tested, refined, and optimized over time.
2. Introducing “Dare to Compare” — A Brand Elevation Play
Instead of relying on price promotions alone, we developed a positioning campaign that reframed how consumers perceived e.l.f.’s value.
“Price was the hook. Value was the story.”
The “Dare to Compare” campaign directly contrasted prestige beauty pricing with e.l.f.’s offering:
- $150 in prestige beauty products
- $20 in comparable e.l.f. products
This was more than a price comparison. It was a strategic brand statement.
The campaign repositioned e.l.f. from a budget alternative to a smart beauty investment, reinforcing quality, efficacy, and confidence at accessible price points — all delivered through CRM at scale.
3. Mastering the “Who” in Frequency (Audience Intelligence)
One foundational insight guided the entire program:
Frequency is not about how often you send. It’s about who you send to.
“The key is balancing frequency with relevance. High-value customers can handle more mail because they find it valuable; the trick is finding the line before overcommunication leads to disenchantment.” — Allan Levy, CEO, Alchemy Worx
Within a database of millions, only a subset of subscribers can sustain high-frequency communication without fatigue. Some customers respond positively to multiple messages per day, while others prefer only occasional touchpoints.
Together we built a segmented frequency framework based on engagement endurance:
- High-frequency messaging for highly engaged subscribers
- Moderate cadence for mid-tier responders
- Protection strategies for low-engagement audiences
This approach transformed frequency from a blunt instrument into a precision tool, reducing disengagement while increasing overall responsiveness.
The Result
The impact was immediate and transformational.
Short-Term Acceleration
Within the first 30 days:
- Email revenue tripled, growing from $40K to $120K per month
Long-Term Growth Engine
Within one year:
- Email revenue exceeded $2 million annually
- Retention became a central driver of bottom-line growth
- CRM evolved from reactive reporting to proactive forecasting
Strategic Foundation
This retention engine:
- Supported e.l.f.’s retail expansion
- Reinforced omnichannel growth
- Helped validate the economics required for future scaling
Today, e.l.f. stands as a $10B global beauty leader, with the CRM architecture built during this partnership remaining a core strategic asset.
What This Means for the Brand
e.l.f.’s journey proved a critical thesis:
Retention isn’t a channel. It’s a growth system.
You don’t fix retention with a tactic. You build it with structure, intelligence, and customer-centric design.
Key lessons from this partnership:
- Lead with value, not just offers
- Segment frequency based on individual behavior
- Use CRM to elevate brand positioning, not merely drive discount sales
Conclusion
e.l.f. Cosmetics’ growth demonstrates what happens when retention is treated as a system rather than a standalone channel. By applying disciplined testing, centering decisions on customer behavior, and aligning messaging across every touchpoint, Alchemy Worx helped transform early momentum into durable, compounding growth.
This wasn’t about isolated optimizations. It was about building a repeatable engine that turned insight into action and loyalty into long-term enterprise value.
“The e.l.f. story is ultimately about the power of the relationship. When you master the data, segment by value, and align your messaging across every channel, you can turn a $1 disruptor into a $10 billion legacy.”
— Allan Levy, CEO, Alchemy Worx
Unlock Your Email & SMS Growth Potential
At Alchemy Worx, we help brands turn engagement into revenue. Get your complimentary acceleration plan, which includes:
- Analysis of your Email/ SMS engagement metrics with actionable best practices.
- Segmentation and reactivation review with strategic recommendations.
- Audit of your email and SMS automations with improvement suggestions.
Start realizing your measurable gains in under four months.
Visit us at alchemyworx.com/lets-talk to get your plan today.
