Retention Marketing in 2025 for Ecommerce

With high acquisition costs and increasing competition, it’s more important than ever for ecommerce brands to invest in customer retention. Retaining existing customers isn’t just more cost-effective—it’s key to driving sustainable growth and maximizing lifetime value.

However, many brands still struggle to retain effectively. They lack the right tools, clear strategies, or customer data to deliver meaningful post-purchase experiences.

Whether it’s knowing when someone revisits your site after 60 days or spotting a high-intent buyer based on browsing patterns, retention requires precise targeting, relevant messaging, and timely follow-ups to successfully increase repeat purchases.

In this guide, we’ll break down what customer retention marketing really looks like for DTC and B2C ecommerce brands— how to measure it, where to focus, and what to prioritize to set up a retention strategy that drives consistent conversions.

What is retention marketing?

Retention marketing is the strategy of keeping existing customers engaged, loyal, and returning to make repeat purchases. Instead of focusing solely on acquiring new customers, it prioritizes building long-term relationships with the ones you already have.

This approach reduces acquisition marketing costs, increases revenue per customer, and creates more predictable growth. 

Retention marketing efforts go beyond sending the occasional email. It includes:

• Onboarding flows that help new customers get value faster
• Loyalty programs that reward frequent purchases
• Customer re-engagement campaigns for past and inactive shoppers
• SMS and push notifications with personalized offers
• Content personalization based on past behavior and preferences

What is selective retention marketing?

Selective retention marketing is a focused approach to retention marketing. Instead of setting up retention efforts targeting every customer, you prioritize those who actually matter to your business—your most valuable customers that drive a high ROI (return on investment).

These are the customers who:

• Frequently purchase and spend more over time
• Stay longer with your brand
• Recommend you to others
• Leave strong reviews and feedback

With selective retention, you're not treating every churn risk equally. You're identifying which customer segments are worth your time, effort, and budget. Based on this, you can shape your retention marketing campaigns to focus on the customers who deliver the highest long-term value.

For example, if 20% of your customers drive 80% of your revenue, focus on that 20%. Use tailored messaging, exclusive perks, or early access offers instead of chasing one-time buyers who may not return.

Customer acquisition vs. retention

Both customer acquisition strategies and retention efforts are important for your ecommerce brand’s sustainable growth. While acquisition helps you grow your customer base, retention helps you grow your revenue. 

But how do you know which one to prioritize and when? It depends on where you are in your business. Let’s break it down.

Customer acquisition

Ideal for:

• New or early-stage brands
• Product launches or entering new markets
• Brands looking to quickly expand reach and visibility

Pros:

• Increases your reach among new audiences
• Helps you grow your customer base fast
• Great for launching new products
• Increases brand awareness

Cons:

• Expensive; it often costs 5x more than retention
• Brings short-term sales without long-term loyalty
• Requires ongoing investment into ads and outreach

Customer retention

Ideal for:

• Brands with an existing customer base
• Businesses focused on profitability and LTV
• Mature brands looking to improve margins

Pros:

• More cost-effective than acquiring new customers
• Builds stronger, long-term revenue
• Increases customer lifetime value (how much a customer spends over time)
• Loyal shoppers are more likely to become brand advocates, referring new shoppers

Cons:

• Takes longer to see results
• Less effective if your existing customer base is small
• Requires consistent follow-up and support

When to focus on acquisition vs retention

Different business needs demand different strategies. While acquisition fuels growth, retention sustains it. Knowing when to prioritize one over the other or when to balance both is key to driving profitability and long-term success.

Here’s a quick breakdown to help you decide where to focus based on your current business situation:

There’s no one-size-fits-all. If you’re just getting started, acquisition is non-negotiable. But once you’ve got a steady customer base, retention marketing strategies deliver a stronger return. They’re more cost-effective, reliable, and can even capture new customers through referrals.

The smartest strategy, however, is to prioritize both—acquire new customers while actively retaining old ones. This way, you continue to grow your customer base while increasing the lifetime value of every customer you bring in. 

Calculating customer retention for B2C

For B2C brands, retention is usually measured by tracking the number of first-time buyers who come back and purchase again within a specific time frame. This helps you understand how well you're building loyalty and repeat behavior.

Instead of tracking overall account-based retention (more common in subscription models), most ecommerce brands measure repeat purchase rate or returning customer rate:

Returning Customer Rate (%) = [N /T] x 100

• N = Number of customers who made more than one purchase
• T = Total number of customers

This helps you understand how well you're driving repeat behavior, not just acquisition.

Pro tip: Choose a time frame that aligns with your average purchase cycle. For consumables, this could be 30 days. For apparel, it might be 90 or 180.

Why is customer lifetime value (CLV) important?

Customer Lifetime Value (CLV) measures the total revenue a single customer is expected to generate for your business over the span of their relationship with you.

Why it matters:

• It helps you decide how much to spend on acquiring new customers.
• You can spot which customer segments are worth more and build around them.
• It gives you a clearer picture of long-term growth, not just monthly spikes.

If your CLV is low, but you're spending a lot on ads or influencer marketing, you're likely bleeding cash.

Predicting LTV with first-party data

LTV (lifetime value) is similar to CLV, but is often used in predictive models. You can estimate LTV using first-party data (your own customer data) like:

• Average order value
• Purchase frequency
• Time between orders
• Product/category preference
• Return rate

Use this data to group customers by value brackets—top spenders, occasional buyers, one-timers—and build tailored retention flows. For example, if a buyer orders 3 times in the first 60 days, they’re likely to stick around longer. Prioritize segments like these in your CRM and email marketing flows.

How to increase customer LTV

The most common tactic many ecommerce brands use to increase customer lifetime value is offering heavy discounts. But that just doesn’t cut it. 

Here are some effective ways to increase customer retention and lifetime value:

1. Improve repeat purchase rate

• Set up automated email flows based on purchase behavior (e.g., reorder reminders, product usage tips).
• Use SMS or WhatsApp nudges after 30, 60, or 90 days of no purchase.
• Offer reorder incentives like free shipping on their second order or a small gift on the third.
• Offer subscription options for products that require recurring purchases.

2. Increase average order value (AOV)

• Create personalized experiences on-site by offering upsells and cross-sells on the cart or product page.
• Offer bundles that group frequently bought together items at a slightly lower combined price.
• Use threshold-based exclusive offers like “Spend $499 more to get free shipping”.

3. Build customer loyalty

• Launch a loyalty or referral program with clear milestones (e.g., exclusive perks after 3 orders).
• Give early access to new drops, sales, or limited-edition products.
• Celebrate small moments—like their first anniversary as a customer—with a small offer or exclusive content.

4. Strengthen post-purchase user experience

• Send follow-ups with product care tips, how-to guides, or related product suggestions.
• Make returns, refunds, and exchanges quick and simple. Bad post-purchase customer experiences are one of the fastest ways to reduce LTV.
• Collect feedback to identify why people leave after one order.

5. Segment and personalize

• Identify your high-value segments and send messages that acknowledge their loyalty and incentivize them for it. 
• Use behavior-based segments—frequent buyers, first-time buyers, inactive for 60+ days, etc—to send messages that match where they are in the customer journey.
• Tailor offers, product suggestions, and content based on what they've browsed or bought.

6. Reduce customer churn rate (drop-offs)

• Monitor inactivity windows and trigger win-back flows with personalized offers to re-engage lapsed customers.
• Find where most one-time buyers drop off (e.g., after bad shipping, lack of follow-up, or irrelevant product recommendations).
• Run a quick net promoter score (NPS) survey after purchase to identify friction points early.

CLV vs LTV: What’s the difference?

Here are the primary differences between CLV and LTV:

• LTV (Lifetime Value) is the total revenue over a customer’s lifecycle. It’s often used as a forecasting metric.
  
  
• CLV (Customer Lifetime Value) is more specific. It represents net profit attributed to the customer, after factoring in customer acquisition costs along with fulfillment and servicing costs.

In many cases, the terms are used interchangeably. But if you’re building forecasts, treat LTV as a forward-looking metric.

Tools for calculating CLV in Ecommerce

If you're only tracking surface-level metrics on Shopify’s default dashboards, you're probably not seeing the full picture of customer value. To really understand and grow CLV, you need tools that give deeper insights, such as:

• Repeat purchase behavior
• Cohort performance
• Customer acquisition cost payback
• Retention signals

Here's a quick breakdown of tools that can help you track and act on CLV better:

Shopify Analytics

Good for: Basic metrics and a starting point if you’re on a budget.

Shopify captures your first-party data about your customers and sales. Its built-in dashboards give you access to sales trends, customer behavior, and product performance, letting you identify repeat customers, conversion rates, and top-performing products. 

While useful for high-level insights, it lacks advanced segmentation or cohort tracking. For a deeper analysis of your retention, you’ll need other tools.

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Lifetimely

Good for: LTV tracking, P&L, and automated reports.

Lifetimely helps online retailers track lifetime value by customer cohort, ad channel, or product. You can also view payback periods and real-time profitability across Shopify and other third-party channels like Amazon. 

It’s great if you want pre-built dashboards for CAC, ROAS (return on ad spend), and product analytics without building anything from scratch.

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Daasity

Good for: Multi-channel brands that want full control over data.

Daasity offers a central dashboard for all your store, ad, and email metrics. You can build custom retention reports, map CAC across channels, and track LTV growth by segment. 

It’s especially useful if you're running both direct-to-consumer (DTC) and wholesale. You can partner with data experts to model performance, forecast growth, and optimize decision-making across your customer journey.

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Polar Analytics

Good for: Quick setup and 1-click reporting across platforms.

Polar Analytics centralizes your metrics from Shopify, Meta, Amazon, Klaviyo, and other platforms. You can monitor CAC, conversion rate, LTV, and inventory KPIs—all in one dashboard. It’s ideal if you don’t want to build anything manually but still need clarity across all acquisition and retention levers.

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RetentionX

Good for: Deep segmentation and automated retention workflows.

RetentionX helps you dig into customer behavior, identify at-risk segments, and trigger automations to win them back. You can use built-in models to forecast churn, spot your highest-LTV products, and create custom segments to improve ROAS and repeat purchases. 

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Triple Whale

Good for: AI-powered insights, advanced attribution, and campaign analysis.

Triple Whale brings in AI agents to run analysis for you, answer data questions, and alert you about underperforming campaigns. Their pixel captures missed customer behavior and links everything to actual LTV. 

It’s solid if you want smarter attribution, faster reporting, and more visibility into what’s actually driving profit.

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Retention marketing strategies for DTC brands

Retention marketing tactics help you bring back your existing customers instead of constantly chasing new ones. For DTC brands, getting your retention strategy right means more repeat orders, higher customer lifetime value, and better margins.

Let’s break down five actionable tactics that go beyond surface-level advice.

1. Build smart, tiered loyalty programs

A loyalty program allows you to reward existing customers for their repeat purchases, encouraging them to keep coming back. 

But, a simple points system won’t cut it anymore. Here’s how to make it work:

• Start with a low-friction sign-up: Keep it clear and quick. Highlight what they get upfront.
• Create clear tiers: Tiered systems motivate your loyal shoppers to reach specific goals, like VIP status or early access perks.
• Reward first-time buyers generously: Make their first interaction feel worthwhile by offering them a huge discount or points for purchasing or joining the program.
• Add emotional value: Birthday perks, surprise gifts, or exclusive sales access make people feel seen.

Sephora’s Beauty Insider is a great example. Basic members get entry-level perks, but higher tiers like “Rouge” offer bigger rewards, like double-value vouchers, for top spenders. It’s simple—better benefits mean better retention.

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2. Automate your post-purchase email flows

Most brands send a thank-you email and don’t continue communicating. That’s a missed opportunity. Instead, set up sequences based on behavior to increase customer engagement and nudge actions from them: 

• Order confirmation. Share information about the delivery time and any tracking link.
• Shipping updates: Proactively share updates about delays.
• Delivery confirmation: Send product usage tips.
• Post-delivery: Send review requests and referral links.
• A month or two after the first order: Send replenishment reminders based on typical usage patterns.

Use basic personalization by referring to the customer by name, including details of the products they ordered, and recommending products they are likely to be interested in. 

Graza, for instance, sends a warm welcome after the first order, inviting buyers into their community and sharing exclusive content. It's a simple move that builds connection and keeps customers coming back.

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3. Leverage customer feedback

A lot of brands ask for reviews, but don’t do anything with them. Here’s how to leverage feedback:

• Identify your happy and most loyal customers: Tag 5-star reviewers as potential VIPs or referral champions. 
• Spot product issues early: If a customer shares a problem, send a customer support follow-up and address the issue immediately.
• Use insights to improve product offering: Analyze reviews, return reasons, and support tickets to spot patterns to improve existing products and identify new product ideas. 
• Incentivize quality reviews: Offer a small discount or reward when a past customer shares a photo or detailed review. 

Here’s an example of a personalized email you can send to customers who proactively review your products: 

“Subject: You made our day 🫶

Hi [First Name],

Just saw your review—thank you for the kind words! We’re thrilled you loved it. As a small thank-you, here’s 15% off on your next order: THANKYOU15.

You’re officially on our radar for early access drops and loyalty perks! 👀

– The [Brand] Team”

4. Retarget high-intent visitors based on behavior

Use on-site behavior to set up smart and relevant follow-ups:

• Abandoned carts: With an average cart abandonment rate of 70%, it’s critical to tap into the opportunity to capture them. Uncover anonymous cart abandoners with identity resolution and target them with personalized messages.
• Browsed multiple pages but didn’t buy: Since these shoppers are high-intent, recommend products similar to what they viewed.
• Viewed the same product but never bought: Send a reminder with user review, UGC, and a discount to nudge them to buy.
• Signed up for back-in-stock notifications: Notify them immediately when it’s restocked, including urgency tactics to nudge action.
• Engaged with support before dropping off: Send messages relevant to the product they asked about and incentivize them to convert.

This behavior-based retargeting can be done over email, SMS, push notifications, or even in-app messages. For example, Larsson & Jennings identified 45% of their anonymous traffic, uncovering 1,000+ visitors per day, sending them emails to turn high-intent visitors into buyers. 

The result? A 5x ROI and more than $25,000 in email revenue, all by plugging new segments into their existing flows.

5. Highlight your existing customers as social proof

Let your current customers do the talking. Here’s how to leverage them in your customer retention strategy:

• Allow past shoppers to leave reviews on your product pages.
• Encourage UGC by offering loyalty points or referral credits to customers who share their experience on social media.
• Increase credibility by including statistics about your product’s popularity within order confirmation emails, e.g., “Over 5,000 people love this, including you!” 
• Repurpose reviews into social media posts, emails, and testimonials to build trust and spotlight happy customers.

Old Navy does this well by featuring product-focused emails with handpicked positive reviews and photos. It builds trust and nudges subscribers closer to purchase.

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Turn retention into a revenue channel with Tie!

Customer retention management is about understanding your shoppers well enough to make sure they continue to engage with your brand and shop from you. That’s what Tie helps with. 

Tie reveals anonymous visitors, enriching each shopper profile with relevant details like demographics, browsing behavior, purchase intent, etc. This removes the guesswork from retention, allowing you to segment your customer base more precisely and retarget them with personalized and relevant messaging.

With better data, you can engage your customers more effectively, improve customer experience, and ultimately increase LTV for your ecommerce brand.

Book a demo to see how Tie can help you improve your customer retention.