May Retention Newsie

Welcome to The Retention Newsie by The Email Marketers - your biweekly dose of what's actually working in email and SMS retention for e-commerce brands. No fluff, no recycled 'best practices.' Just what we're seeing in the trenches with 50+ brands.

Let's get into it. 

📬️ Inbox Rundown

• 🎯 Join us at The Retention Roadshow. Hang out with The Email Marketers IRL in LA! (Scroll all the way down)
• 🤖 The AI agency split is here. Brands are already choosing (and firing) agencies based on AI capability. We break down what's actually happening.
• 🔁 The "consumable behind the durable." A retention play hiding inside every one-time-purchase brand.
• 📉 Google AI Overviews are crushing organic clicks. Down 38%. Your owned channels just got more valuable.
• 📊 The email stat that should be on a billboard. 30% of revenue from 2% of sends.
• 📱 Gmail just turned the promo tab into an algorithm. What it means for your program.
• 📈 Postscript raises $65M. Conversational SMS commerce is coming.

Here's what we're seeing in competitive pitches right now: brands are choosing agencies based on AI capability, not creative portfolios.

A CPG brand we spoke with recently passed on working with an established agency. The reason? A competitor had built a proprietary AI platform that created a rapid experimentation flywheel. Automated A/B testing, data-driven feedback loops, iteration cycles that would take a traditional team weeks compressed into days. The AI capability was the primary differentiator that won the deal.

This is not an isolated case.

We're hearing from PE investors that AI-native agencies are commanding double the EBITDA multiples of traditional service businesses at similar scale. The gap between a 5x multiple and a 10x+ multiple? Whether you've built proprietary AI systems or you're just using ChatGPT in a browser tab.

And here's the part that should make every brand pay attention: the agencies that survive this transition will operate more like software companies than service providers. The ones that just make pretty creative? They're going to struggle.

The counterintuitive part: some brands will fire their agencies in the next 12 months, convinced they can replicate the work in-house with AI platforms. We've seen this movie before with social media management, SEO, and now retention marketing. After one or two quarters of tanked email and SMS revenue, they'll realize how much strategic work agencies do on the backend. The execution was never the hard part. The strategy was.

So what does this actually mean for your brand?

If you're evaluating agencies right now, ask these questions:

• What proprietary AI tools have you built? (Not "do you use AI?" Everyone uses AI.)
• How has AI changed your testing velocity? Show me the numbers.
• What does your experimentation flywheel look like? Walk me through it.
• How are you using AI to surface insights I wouldn't find on my own?

If you're running an agency, the playbook is clear: invest in building proprietary AI workflows now, before costs rise and before it becomes table stakes. One agency CEO we know just made AI tool adoption a formal quarterly performance metric for every team member. Not just leadership. Everyone. They've already cut client reporting time by more than half.

The agencies that differentiate on retention strategy will find execution easier and more profitable. The window to become AI-native is closing fast.

Book a Free Call to see how we're using AI to drive better results for retention programs.

We had a conversation with a durable goods brand last month that uncovered something brilliant.

Their biggest email opportunity wasn't selling more of their core product. It was the consumables hiding behind it.

The product required regular filter replacements for different use cases. Most customers had no idea. They bought the main product, loved it, and never came back because they didn't realize it needed ongoing maintenance items.

Sound familiar? This pattern is everywhere:

• Water filtration systems → replacement filters
• Air purifiers → filter cartridges
• Coffee machines → descaling solutions and filters
• Kitchen appliances → replacement blades, gaskets, accessories

The "consumable behind the durable" is one of the most underutilized retention email opportunities we see. If your brand sells a product that requires refills, replacements, or accessories, you're sitting on a recurring revenue stream that most of your customers don't even know exists.

The fix is straightforward:

• Map every consumable or accessory tied to your core product
• Build a post-purchase education flow that teaches customers about maintenance and replacement cycles
• Set up replenishment reminders based on average usage timelines
• Create a subscription option for the consumables (not the main product)

You're not upselling. You're helping customers get more value from something they already bought. That's the difference between a pushy cross-sell and a genuinely useful retention flow.

📉 Google AI Overviews reduce organic clicks by 38%

A new field study confirmed what we've been warning about: AI-mediated search is compressing the traditional organic discovery path for e-commerce. Your email list, your SMS subscribers, and your post-purchase flows are not just revenue channels. They are your insurance policy. The brands investing in owned channels now are the ones who will survive the AI search transition.

📊 30% of email revenue comes from 2% of sends

The 2026 email benchmarks are in (Hostinger/Validity data). Automated flows generate 30% of all email revenue from just 2% of total sends. That's 16x more revenue per send than campaigns. If your flows are generating less than 30% of email revenue, you are leaving money on the table. Also worth noting: only 47% of companies design mobile-responsive emails despite mobile being the dominant device. That gap is bigger than most brands realize.

📱 Gmail turned the promo tab into an algorithm

Gmail's biggest overhaul in years just landed. The promotional inbox is evolving into an engagement-based feed, similar to social media. Low-engagement senders get buried. Google Postmaster v1 is shutting down and v2 is launching. If you're still blasting your full list without segmentation, your deliverability is about to take a hit. Quality over quantity is no longer a suggestion. It's how Gmail's algorithm works now.

💰️ Postscript raises $65M Series C (Salesforce Ventures)

Postscript is betting big on conversational commerce: purchases completed entirely within SMS threads. They're at 20,000+ active Shopify merchants. The Shopify-exclusive focus is interesting. Whether "buy inside a text message" becomes mainstream behavior is still an open question, but $65M says some very smart investors think it will.

📲 Attentive analyzed 25 billion SMS messages. The results are clear.

Scarcity + urgency boosts conversion rates by 12%. Percentage discounts outperform dollar amounts by 10%. Second-person POV ("you" language) adds 9%. And here's the one that surprised us: humor in offer messages actually hurts performance by 11.4% on conversion rate and 5% on click-through. Direct and urgent beats clever every time in SMS.

📉 The Klaviyo paradox: record profit, 20% stock crash

Klaviyo posted $358M in Q1 revenue (+28% YoY), their first GAAP profit ever, and the stock dropped 20% after hours. The market is worried about growth deceleration in H2. Also worth watching: 78% of Klaviyo's ARR is tied to Shopify. If you're building your entire retention stack on Klaviyo, understanding that dependency matters. The platform is healthy. The question is whether the easy growth era is over.

🎯 Join us at The Retention Roadshow Los Angeles

Commerce Roundtable is bringing The Retention Roadshow to Los Angeles on June 10 at the Santa Monica Proper Hotel. It’s a one-day workshop experience built for retention marketers, operators, and eCommerce teams who want tactical strategies they can actually apply across email, SMS, and lifecycle marketing. Expect hands-on sessions, real operator insights, and practical takeaways focused on driving repeat revenue and building smarter retention programs.

And yes, The Email Marketers will be there! Our very own CEO, Melanie Balke, is joining Chase Dimond and Nick Shackelford as speakers at the LA stop alongside a curated room of marketers and operators for a day of workshops, conversations, and retention-focused deep dives. If you’re in LA, come hang with us IRL, meet the team, and grab actionable ideas you can put to work immediately. Spots are limited to keep the experience interactive, so lock in your seat while you still can.

Lock in your spot today!

Your owned channels are the only asset no algorithm change can take away. We’re here if you want a second opinion on whether your email and SMS program is keeping up.