5% Increase in This Audience Can Double Profits. Here’s How I’ve Done It
Why retention beats acquisition as the most powerful growth lever in marketing
Retention is the Real Growth Hack Marketers Ignore
When I look back at some of my biggest wins in marketing, they did not come from flashy ad campaigns or headline-grabbing stunts. They came from something much less glamorous: retention.
Most marketers (and founders, if we are being honest) spend the bulk of their energy on acquisition. They want new customers, new subscribers, new eyeballs. I have been guilty of this myself, especially when managing large paid media budgets. There is a dopamine rush in seeing traffic graphs spike after turning on a new campaign. But here is the thing: if you cannot keep the customers you already worked so hard to get, you are pouring water into a leaky bucket.
Research backs this up. Bain & Company found that increasing customer retention by just 5% can boost profits anywhere from 25% to 95%. That is because existing customers not only buy more over time, they also cost less to serve, are more likely to refer others, and are less price sensitive. In other words, retention compounds in a way acquisition rarely does.
My Own Lessons in Retention
At Wise Publishing, where I led marketing and product growth, we had over a million subscribers on our email and push notification lists. Early on, we spent heavily on acquisition by buying ads, testing new channels, and building out SEO. That got us growth, but the real profit came when we figured out how to keep people engaged.
One of my more controversial experiments was with push notifications. We went from sending one notification a day to six. On paper, this sounds like a recipe for mass unsubscribes, and yes, we annoyed a chunk of users. But here is the reality: revenue tripled. Unsubscribes spiked, but new subscribers outpaced the losses, and the lift in revenue was worth the trade off. That experiment taught me an uncomfortable truth about retention. It is not about keeping everyone. It is about keeping the right people engaged and profitable while having the stomach to lose the ones who were never going to stick anyway.
At StorageVault, a completely different type of business, retention looked different. Self storage is often a “set it and forget it” product, but student customers were notoriously flighty. To solve this, we created a seasonal playbook that made the entire storage journey frictionless, from contest-based offers to trained front line staff who could answer questions on the spot. By reducing churn and improving renewal rates, we drove more than $2.39 million in seasonal revenue in a single campaign. That is retention in action: fewer drop offs, more renewals, bigger lifetime value.
How the Best Companies Retain Users
Retention is not one size fits all, but the best companies treat it as a core growth strategy. Here are a few playbooks I have seen work, both in my own experience and across industries:
1. Onboarding that actually works.
The first 7 to 14 days are critical for retention. Apps like Duolingo know this. They gamify onboarding with streaks, levels, and push reminders that keep users coming back daily until the habit sticks. At Wise, we leaned on a strong welcome sequence that got readers hooked on the value of our content before asking them to upgrade or engage deeper.
2. Lifecycle email and push sequences.
Retention lives and dies on whether you stay relevant. Spotify does this brilliantly with their personalized playlists, year end “Wrapped” campaigns, and re engagement emails. At Wise, personalization was not as advanced, but we used segmentation to make sure subscribers got content aligned to their interests, which boosted click through rates and kept list churn low.
3. Loyalty programs and rewards.
Starbucks is the poster child here. Their loyalty app has over 30 million members in the US alone, and it drives nearly half of their revenue. The genius is that rewards are not just about freebies, they are about creating stickiness. Customers reload gift cards, earn stars, and choose Starbucks over competitors because they are already invested.
4. Surprise and delight.
This does not have to be expensive. Zappos famously empowered customer service reps to send flowers or hand written notes when they spotted opportunities. Those small touches created lifetime loyalty. At StorageVault, we did not send flowers, but we did make sure contest winners felt celebrated and supported. That human touch built long term goodwill.
5. Community and belonging.
Some of the most powerful retention strategies tap into identity. CrossFit is not just a workout, it is a tribe. Tesla is not just a car, it is a movement. When customers feel they belong, retention becomes natural. I have seen smaller finance brands achieve this by creating exclusive communities around investing or money tips, where customers stick around because the brand is part of their daily conversations.
Why Marketers Should Rethink Their Spend
The math is simple. Acquiring a new customer can cost five to seven times more than keeping an existing one. Yet most marketing budgets still skew toward acquisition. Imagine if even 20% of that budget shifted toward retention initiatives: better onboarding, more personalized communication, smarter loyalty programs.
In my experience, the best growth does not come from doing more acquisition. It comes from balancing acquisition with retention and making sure the leaky bucket is sealed. If you can do both well, growth compounds in a way that paid campaigns alone cannot deliver.
Closing Thought
If you are a marketer reading this, here is my challenge. Audit your current strategy. How much of your time and budget is spent on chasing new customers versus keeping the ones you already have? I would bet acquisition wins by a landslide. Flip that ratio, even slightly, and you will unlock growth that feels almost unfair.
Retention is not sexy. It does not always win awards. But it wins revenue, and that is what we are really here for.