Regardless of your brand's size or scope, doubling down on customer retention can bolster LTV and cultivate a community of brand evangelists. However, most brands fall short in their attempts to offer experiences that keep customers engaged.

So, we sat down with Michael Preysman, founder of the notorious fashion brand Everlane, to get his insider knowledge on how brands can leverage personalization to improve retention and drive bottom-line profits.

Keep reading to discover:

• How retention evolved from a buzzword to a necessity
• How most brands' retention efforts fall short
• Why Michael recommends Monocle to close the retention gap

"When it comes to retention, it's all about identifying your best customers and tailoring an experience that keeps them around rather than allocating your resources to shoppers who are only mildly interested in your brand."
— Michael Preysman, Founder of Everlane

How retention evolved from a buzzword to a necessity

It's easy to lump retention, loyalty, and advocacy in with other retail buzzwords, but most brands underestimate the value of keeping loyal customers in their ecosystem. According to leading management consultancy Bain & Company, a 5% increase in retention can result in a 25% bottom-line boost. Why such a dramatic return on a relatively slight gain? Simply put, loyal customers produce higher LTV over time — significantly more than the single-purchase buyers and window shoppers that most brands spend millions trying to court.

In Michael's experience, brands that emphasize new customer acquisition mainly focus on CPA and short-term profits. To them, having a constant flow of new site visitors is beneficial despite the immense spend involved in trying to stand out in a crowded digital environment. Conversely, brands that invest in retention (like Everlane) spend most of their time identifying their most loyal customers and improving their experience via personalized offers, early access to new products, and much more. As these brands continue to offer tailored incentives and experiences, their chances of improving customer LTV and advocacy increase dramatically.

"Everlane's long-term strategy involves deconstructing the entire customer lifecycle and supplementing it with unique promotions and experiences every step of the way. That step alone is one of the fastest paths to long-term retention."

How most brands' retention efforts fall short

From Michael's point of view, the leading blocker for customer retention is the disjointed nature of the contemporary buyer's journey.

During the early days of ecommerce, customers would typically land on a homepage, navigate product menus, and checkout. There wasn't much in the way of discovery or social proof because prominent ad and review platforms didn't exist.

However, with the introduction of social commerce, review platforms, and now AI, the customer journey has become much more diverse. This makes identifying how your customers found your brand and why they chose to stick around more difficult, which inevitably impacts the strength of your personalization and retention efforts.

To mitigate these effects, many brands have resorted to relying on excess promotions, which ultimately dilute brand equity and don't cater to customers in a personalized way. Michael avoids falling into this trap by segmenting users by their levels of loyalty — time since their first purchase, buying history, etc. — and conducting a deep analysis of their behavioral data to understand their needs.

This data-driven process will paint a much clearer customer persona and lay the foundation for a more personalized shopping experience. From there, Michael recommends leveraging AI engines to deploy unique and personalized offers that elevate the customer experience at scale.

"Offers are one of the most widely used and poorly managed parts of the ecommerce stack. Managing them correctly is an untapped resource for personalization and the bottom line. That's why I love Monocle. It's a seamless way to engage loyal customers with incentives that match their unique spending habits and purchase intent."

Why Michael recommends Monocle to close the retention gap

In Michael's experience, personalized experiences and offers are among the most potent ways brands can boost customer retention. However, personalizing offers at scale often involves significant resources and data that most brands simply do not have. His preferred solution for brands looking to address this shortcoming is Monocle.

In Michael's words, the well-known secret in ecommerce is that everyone runs promotions and discounts to win back customers and delight existing ones. However, where most brands ramp up their frequency to achieve this feat, Monocle delivers value directly to the customer in the form of custom offers based on purchase intent and incremental profitability.

Rather than sending promotions to all customers in a mass send, Monocle analyzes hundreds of shopper signals to generate personalized incentives on a per-user basis. Monocle's causal AI also reveals which promotions led to a conversion, removing the attribution guesswork from your promotions strategy. Combining Monocle with other unique non-monetary offers and experiences helps brands profitably drive customer retention even in an increasingly competitive digital environment.

"There's a huge gap in the market for optimized promotions that boost retention and drive bottom-line profit. Monocle fills that gap."

Unlock a more personalized and profitable retention strategy with Monocle

Gone are the days when retention took a backseat to new customer acquisition. With Monocle, cultivating personalized and profitable offers that keep loyal shoppers coming back has never been easier.

Are you ready to drive more profits from your retention strategy?

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