10 Retention Challenges You’re Facing Right Now—And How to Fix Them

Hi team,

Fresh off Retention Uncensored London, we walked away with 38 pages of notes from 16 roundtable discussions covering everything from retention planning to segmentation, feedback loops, and, of course, AI.

My biggest takeaway: Retention marketing isn’t getting any easier.

Every conversation I’ve had with brands lately sounds the same—rising CAC, disengaged customers, shrinking budgets. Everyone’s trying to crack the same problems, and honestly, the playbook isn’t as straightforward as it used to be.

So after dozens of roundtables, hundreds of convos, and way too many late-night Slack debates, I’ve distilled the 10 biggest retention challenges brands are fighting right now—and what’s actually working to solve them.

If you’re feeling the pressure, you’re not alone. Let’s get into it.

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1. The High CAC, Low Retention Trap

Acquisition costs keep rising, but many brands haven’t adjusted how they handle retention. Too much effort still goes into first-order discounts without a real strategy for keeping customers engaged.

What works: Instead of relying on discounts alone, brands are testing bundles, surprise gifts, and early segmentation to guide high-intent customers toward repeat purchases. Some are even bringing back direct mail in post-purchase flows—actual letters nudging customers toward a second order.

2. Loyalty Programs Aren’t Magic (But Everyone Acts Like They Are)

Loyalty programs are often treated like an automatic retention booster, but most brands don’t put in the work to make them engaging and feel like an extension of their brand. Many programs are built around intricate systems that customers barely understand, let alone use. 

What works: The best loyalty strategies go beyond transactions. Custom-tiered perks like early product access and exclusive experiences drive stronger engagement than generic rewards. The best brands know that clicking “deploy” is not enough to drive value; pushing folks thoughtfully through the tiers on an engagement journey with your brand is. 

3. The Segmentation Struggle Is Real

Brands want personalized marketing, but segmentation is either too basic (engaged vs. unengaged) or too complex to act on. Teams get stuck overanalyzing data instead of applying it. (I think Yotpo might be the first real actionable retention marketing platform, or at least that is the goal.)

What works: Entry product-based segmentation is proving effective. Instead of treating all new customers the same, some smart brands segment based on the first product purchased to predict what they’ll buy next. Simple pop-ups or post-purchase surveys that ask whether a purchase is a gift or personal use also help tailor retention efforts without overcomplicating things.

4. Email and SMS Overload Is Killing Engagement

Customers are unsubscribing more than ever. Retention teams trying to compensate by increasing send volume are seeing diminishing returns.

What works: Brands are shifting from high-volume blasts to smarter, segmented messaging. Some are using email behavior to personalize onsite experiences, like Dr. Martens showing men’s products to customers who engage with men’s email content. WhatsApp is gaining traction in Europe as a more conversational channel that doesn’t contribute to inbox fatigue.

5. AI Everywhere, But Very Few Fully Trust It (Yet)

AI is everywhere in retention marketing, from copywriting to customer support, but most teams are still testing where it actually delivers value. Some are experimenting with AI-generated content, while others are using it for data analysis and automation.

What works: AI is effective when it enhances, not replaces, human decision-making. Teams are using AI for scale—automating responses and surfacing insights—but keeping humans in the loop for quality control. AI-generated creative is getting pushback, with some brands seeing negative customer reactions when they try to swap real imagery for AI-generated visuals.

6. Retention Isn’t Just a CRM Problem, But No One Acts Like It

Most brands still treat retention like a lifecycle marketing function when, in reality, it touches product, CX, logistics, and even acquisition. When teams operate in silos, critical customer insights get lost, and retention suffers.

What works: The best brands are getting retention on every department’s radar. CX teams surface friction points, product teams refine based on retention data, and acquisition teams pull insights from high LTV customers to refine targeting. Retention works best when it's embedded across the business, not just sitting in an email or SMS team.

7. The ‘Loyalty vs. Subscription’ Debate

Loyalty programs and subscriptions both aim to increase retention, but brands struggle to make them work together. Some subscriptions feel transactional, while some loyalty programs lack enough value to drive real commitment.

What works: Some successful brands blend the two. Loyalty points for subscription renewals, VIP perks for subscribers, and exclusive early access for high-tier members create a hybrid model that maximizes engagement. When structured well, loyalty programs can act as a stepping stone into subscriptions and vice versa.

8. Customers Expect Personalization—Even If They Don’t Say It

Shoppers don’t always articulate what they want, but they react when brands don’t get it right. They ignore irrelevant emails, bounce from bad product recommendations, and churn when the experience doesn’t match their needs.

What works: Smart brands are using predictive analytics to anticipate needs before customers express them. Instead of blasting generic upsells, they map purchase patterns and personalize next-best offers. Post-purchase surveys, browsing behavior, and even timing data (when a customer typically reorders) all play a role in getting this right.

9. Acquisition Is Getting Harder, and Retention Teams Are Feeling It

Retention teams aren’t just dealing with disengaged customers—they’re dealing with different customers. As acquisition gets more expensive, some brands are lowering barriers to entry with cheaper products, but that means they’re attracting customers with lower LTV potential.

What works: Retention teams are adapting by focusing on education early in the journey. Deeply educational welcome flows, product quizzes, and tailored onboarding experiences help increase engagement and set expectations. The best retention strategies don’t start after the first purchase—they start before it.

10. The ‘More Channels, More Problems’ Dilemma: 

The number of retention channels is growing, from email and SMS to WhatsApp, DMs, and direct mail. But more touchpoints don’t automatically mean better retention—especially when brands struggle to connect the dots.

What works: Unifying customer data is critical. The brands seeing the best results are ensuring that what happens in one channel informs another. If a customer engages heavily with SMS but ignores email, the strategy shifts. If they show high intent in a social DM, follow-up messaging reflects that. A scattered approach leads to disengagement, but a unified strategy keeps customers engaged.

Some Hot Takes from Retention Uncensored 😅

• Direct mail is making a real comeback – Not just for lapsed customers, but mid-funnel. Brands are testing triggered mailers based on predictive purchase windows to nudge the next order. (And yes, it’s working.)

• Brands are way too obsessed with attribution – Some of the most successful teams are zooming out, focusing less on channel-specific ROI and more on blended retention impact.

• Everyone is rethinking discounts – Some brands are pulling back entirely, others are making them more exclusive (higher tiers, limited-time offers), and a few are testing ‘price protection’ models to build trust.

• Customer service is an untapped retention lever – The best brands aren’t stopping at just solving issues; they’re surfacing insights and proactively shaping the customer journey based on what customers are actually saying.

• More brands are testing a ‘slow burn’ approach to whales – Instead of aggressively upselling; they’re nurturing their highest-value customers with curated experiences, exclusive invites, and unexpected perks.

Retention isn’t getting any easier, but the smartest brands are evolving. The common thread is that those who win at retention right now are playing a long game—focusing on data, relationships, and brand experience instead of short-term quick fixes.

That’s it for this week!

Cheers, 

Eli 💛

P.S. Looking for inspo on your next email/sms campaign?

I know you will love this.