Rethinking the Budget Question
Not “How much should we spend on retention?”, but “How much are we willing to invest to protect and grow the customers we’ve already paid to acquire?”
It’s a subtle shift in framing, but a profound one in strategy. Most organisations still approach retention as an afterthought, a cost centre to be contained rather than an asset to be cultivated. Yet the economics are unambiguous: customer acquisition costs are rising, attention is harder to buy, and every lost customer erodes not just revenue but profit margin.
The Economics Are Clear
The numbers have been consistent for years, yet many growth strategies ignore them.
- Retained customers spend 67% more and drive 65% of revenue
- A 5% increase in retention can lift profits by 25% to 95%
- You are 14x more likely to convert a returning customer than a new one
Acquiring a new customer costs up to 5x more than retaining one
- Despite this, budgets remain heavily skewed to acquisition. The default playbook hasn’t caught up to today’s market dynamics, and it shows.
Why Some Brands Pull Ahead
The difference isn’t effort. It’s infrastructure. Klaviyo benchmarks show the top 10% of brands outperform their peers dramatically, generating:
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5–10x higher revenue per recipient (RPR)
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Significantly higher conversion rates
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Deeper engagement and loyalty over time
They’re not just running campaigns. They’ve built live, behaviour-led email ecosystems that respond in real time, powered by behavioural triggers, dynamic content, and hyper-personalisation.
And they don’t view retention as a marketing function alone. Finance, Marketing, and Operations align at the C-suite level around a single growth goal: building systems that keep customers longer, at higher lifetime value.
Most allocate 40–60% of their marketing spend to retention-first strategies, not acquisition overspend.
Why Most Are Still Behind
It’s not that brands don’t want to evolve. It’s that most aren’t built to.
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Teams are structured for output, not orchestration, skilled at execution but without the frameworks or time to design behaviour-led journeys.
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Budgets are misaligned, concentrated at the top of the funnel, leaving little for retention infrastructure, data systems, or strategic planning.
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Tech stacks are fragmented without the ability to act on live signals, churn compounds silently.
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External support is misaligned, many partners are still optimised for campaigns, not ecosystems, keeping brands locked in cycles of traffic spikes and quick wins.
This isn’t a creativity problem. It’s an operational one, and it costs more than most realise.
The 3% Opportunity
Only 3% of brands have adopted true live, behaviour-led email marketing, real-time, dynamic campaigns that engage customers in the moment.
The rest are still relying on static campaigns, batch sends, and acquisition overspend. This gap is widening and it represents one of the largest untapped levers for profitable growth.
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Live content can lift click-through rates by up to 70%
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Real-time campaigns can drive up to 47% more revenue
Those who act now won’t just catch up, they’ll pull ahead. Because this isn’t about chasing trends or shiny new tools. It’s about redesigning how growth works.
From Campaigns to Compounding Value
To compete at the top of Klaviyo benchmarks, retention can’t be a tactic. It has to become a core pillar of growth strategy, supported by the right infrastructure, capability-building, and budget allocation.
This is the shift underway:
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From campaigns to customer systems
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From outputs to orchestration
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From short-term spikes to compounding value
The brands pulling away are blending the precision of AI with the intuition of human insight. They’re designing journeys that are intelligent, contextual, and customer-led and every interaction becomes meaningful, memorable, and measurable.
