In today’s saturated digital landscape, acquisition may win the clicks—but retention wins the game. Marketers facing higher customer acquisition costs, shrinking budgets, and increasing competition can’t afford to overlook the power of keeping existing users engaged.

Here are five essential data-backed insights to guide your retention strategy in 2025—and three practical steps you can take today to get ahead.

5 Must-Know Facts About Retention

1. Retention is more profitable than acquisition

Marketers often spend the bulk of their budget chasing new users, but the real value lies in those who already know you. A 5% increase in customer retention can lead to a 25% to 95% boost in profits (HSO). Why? Because loyal customers spend 67% more than new ones and are far more likely to convert again and again.

These users are already familiar with your product or service, which means you spend less time convincing them and more time deepening engagement. In performance marketing, every incremental improvement in retention drives compounding value over time.

2. Retention is more cost-effective

It’s not just profitable—it’s efficient. Acquiring a new customer costs five times more than retaining an existing one (HSO). That number is even more staggering when you consider that the average acquisition cost in retail is now $226 per user (Clutch).

When CAC is high and budgets are tight, retention becomes the smarter investment. Instead of spending thousands trying to convince someone new to try your app, you can re-engage someone who already downloaded it—at a fraction of the cost.

3. Customer loyalty is declining

The modern consumer has more options—and less patience—than ever before. Only 69% of consumers reported brand loyalty in 2024, a steep drop from 77% in 2022 (Emarsys). Why the decline? Frictionless shopping, personalized ads, and product abundance have made it easier to switch brands with a swipe or click.

That’s why retention efforts must go beyond discounts or surface-level perks. Brands must foster emotional connections, deliver personalized value, and offer consistently exceptional user experiences to keep loyalty from eroding.

4. Retention drives lifetime value and marketing ROI.

Retention directly impacts two of the most important metrics for any marketer: customer lifetime value (LTV) and the LTV:CAC ratio. A 3:1 ratio or higher is considered healthy—and increasing retention helps get you there (Clutch).

The longer a user stays engaged, the more value they deliver over time. This not only makes campaigns more efficient, it also strengthens overall business predictability—making it easier to plan, forecast, and scale.

5. Personalization and experience are everything.

Retention is driven by relevance. Today’s users expect seamless, personalized experiences across all platforms and channels. Brands that deliver tailored engagement are far more likely to retain users and turn them into loyalists (G2; HSO).

Whether it’s dynamic creative optimized by behavior, personalized email journeys, or in-app experiences that respond to user actions, personalization pays off. Done right, it shows your audience that you know them—and that you’re listening.

3 Things Marketers Can Do Today to Improve Retention

While long-term retention strategies often require collaboration across product, marketing, and engineering teams, there are actionable steps marketers can take right now to drive impact. Here are three high-leverage plays you can implement immediately.

1. Rethink your onboarding experience

The moment a user opens your app for the first time, your retention journey begins. If the experience is clunky, confusing, or irrelevant, you risk losing them before they ever reach value. Onboarding should be simple, goal-oriented, and ideally personalized. Ask yourself:

  • Are we clearly showing the user what to do next?

  • Is the core value proposition obvious within the first 30 seconds?

  • Are we providing contextual nudges to help users build habits?

Whether through an interactive tutorial, progressive disclosure, or triggered messages, great onboarding creates momentum—and that momentum leads to engagement.

2. Use cross-channel retargeting to re-engage dormant users.

Retention doesn’t stop at Day 1. Users who lapse after their first session may still be interested—but distracted. That’s where retargeting comes in. By using platforms like mobile and Connected TV (CTV) in tandem, brands can reconnect with users in high-impact moments and drive them back into the app.

Cross-screen retargeting not only boosts brand recall but also allows you to serve personalized creatives at scale, tailored to user behavior, cohort, or lifecycle stage. For example, a user who browsed a product but didn’t convert might see a reminder on their smart TV the next time they open a streaming app. It’s retention, reimagined.

3. Start tracking—and acting on—retention metrics

Too many marketers still focus exclusively on top-of-funnel performance. But retention lives in the metrics. Start by setting benchmarks for the following KPIs:

  • Retention rate: How many users return after 1 day, 7 days, or 30 days?

  • Churn rate: How many users stop using the app over time?

  • Purchase frequency: How often do your users convert or complete key actions?

  • LTV: What is the projected value of a user across their lifecycle?

Tracking these metrics over time—and breaking them down by segment—will give you the insights needed to experiment, personalize, and optimize your campaigns.

Key Takeaways

  • Retention drives profit. Even a small improvement in retention can lead to significant revenue growth.

  • Retention is more cost-effective than acquisition. Focus on deepening relationships with current users to reduce CAC and increase LTV.

  • Personalization, retargeting, and metric-driven strategies are essential for marketers aiming to drive sustainable growth in 2025.

Ready to Get Your Retention on Lock?

Retention isn’t just a marketing metric—it’s a business imperative. YouAppi helps leading brands build smarter re-engagement strategies across mobile and CTV that deliver results where it matters: long-term loyalty and revenue growth.