Back to articles

Why retention marketing will be a critical D2C strategy in 2023

It’s no secret that retention marketing is essential for any direct-to-consumer (D2C) brand. After all, it’s much cheaper and more effective to keep current customers than it is to acquire new ones – 5 to 25 times cheaper according to Havard Business Review. But as consumer behaviour continues to change, brands will need to focus even more on retention marketing strategies in order to stay competitive. 

As the barriers to entry continue to fall, there will be more and more D2C brands entering the market. And with more choice comes more power for consumers. They’ll be able to pick and choose which brands they want to buy from based on a variety of factors, including price, quality, and customer service.

In this blog post, we’ll explore why retention marketing will be a critical strategy for D2C brands in 2023 and beyond.

What is retention marketing?

Retention marketing is all about keeping your current customers engaged and loyal to your brand. This can be done through a variety of strategies, such as loyalty programs, targeted email campaigns and automation, personalisation, and more.

Increased customer acquisition costs

Retention marketing will be vital in 2023 because of the rise in acquisition costs. According to Profit Well, the overall customer acquisition cost has risen almost 50% over the last five years. This is due to a number of factors, such as the increasing cost of paid advertising and the proliferation of new D2C brands.

The importance of customer lifetime value (CTV)

This highlights the importance of customer lifetime value (CLV). CLV is a metric that measures the total value of a customer to a brand over the course of their relationship. As acquisition costs rise, it’s more important than ever for brands to focus on maximising CLV.

And the above is particularly true as more brands move to a direct-to-consumer model. To stand out from competitors, make sure your retention plan is unrivalled. Invest in strategies like loyalty programs and email marketing to keep your customers coming back.

Enter retention strategies

To stand out in this increasingly competitive landscape, your brand will need to focus on creating long-term relationships with customers. That’s where retention marketing comes in. By investing in strategies like loyalty programs and email marketing, brands can keep their customers coming back, even when there are other options available.

How to map out a retention marketing strategy?

Now that we’ve explained why retention marketing is so important for D2C brands, let’s take a look at how you can create a retention marketing strategy for your own brand. Here are a few key things that you can action to improve retention and maximise CLV:

  1. Prioritise a great customer experience. This means providing exceptional customer service, offering high-quality products, and making it easy for customers to purchase from you.
  2. Focus on building strong relationships with your customers. This can be done through personalisation, targeted email automations, SMS campaigns, and loyalty programs.
  3. Ensure you are constantly measuring and analysing retention data so you can identify areas of improvement. We did this for Frobishers, who experienced a 47% retention rate!

Retention marketing examples

// Scarpetta

When planning how to grow ecommerce businesses, we know referral mechanisms work. Integrating Yotpo for Scarpetta meant that they can reward loyal customers while avoiding steep discounting. A referral mechanism incentivised word-of-mouth marketing and lessens their reliance on revenue generation through paid acquisition channels. Want to learn more about our work with Scarpetta?

// Hu Kitchen

We know how important social proof is in the consumer’s decision-making process. That’s why we integrated Yotpo to display verified customer reviews which contributed to a +126% increase in website conversion rates. Click here to find out more about our work with Hu Kitchen.

Hu Kitchen Reviews

To conclude:

Ultimately, the bottom line is this: if you want to stay competitive as a D2C brand, you need to focus on keeping your customers happy and engaged. Retention marketing will be a critical part of achieving that goal. 2023 is going to be a big year for D2C brands, and those that have a solid retention marketing strategy will be the ones that succeed.

If you’re stuck on how to execute a comprehensive retention strategy, let’s have a chat. Consulting on retention strategies is one of our specialisms and we’re here to help!

If you enjoyed this you might also like // Churn Rate: How to Reduce it on Your Ecommerce Store


Inspiring behaviour change through visual experiences. Our digital design services ensure instant clarity and visuals that cut-through in a cluttered market.


Engineering intelligent solutions is what we do. Shopify experts, we have extended the capabilities of what’s possible through our suite of in-house software.


Accelerate what’s possible with media and strategy. Blending dynamic thinking with plain logic to deliver a digital marketing toolkit, tailored for growth.