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On February 20th, Klaviyo revealed its latest product roadmap, and today we're going to break down what that means for consumer brands planning their retention strategies. But before we dive in, a bit of context.
For the last decade, the word growth for DTC brands has been synonymous with paid ads. All of the focus, all of the resources and strategies, and all of the discussion was centred around what everyone was doing on paid social. Now, I know you know where I'm going with this, so bear with me for just a moment.
I will be the first to say it: for 99.9% of consumer brands, paid ads are essential for building scalable distribution channels to a wide net of in-market potential customers.
However...
Acquiring new customers is only half of the job; retaining them is the other part. And sometimes, that's actually not as easy as it sounds.
When capital is abundant and CACs are low, acquiring new customers can easily seem like the only priority. But the last few years for brands have been a rude awakening that things are not always this simple. The days of acquiring new customers and hoping they'll come back are long gone for most DTC brands.
Sure, many brands are still profitable on first order -- as they should be! It should be every brand founder or operator's mission to engineer the right combination of unit economics, product offer, and growth strategy to generate positive contribution dollars on first order. But even if you manage to, and for most brands (even those with genuine PMF) that's honestly still a pretty big if, your growth rate will still be capped by your ability to generate sufficient, positive free cashflow from solely acquiring new customers. And like I said, most brands aren't lucky enough with the former to even think about the latter.
So retention: why does it matter? Well, like I said: acquiring customers is only part of the growth equation. You can't build a durable business when you live and die by what your ad account metrics are any given day or hour. Building a company this way is like pouring a foundation from the best concrete, only to start putting up walls made from cardboard. All I'm saying is, don't be surprised if your roof caves in when it starts to rain.
As you can tell by now, I can go on for days talking about growth rates, free cashflow, durability of revenue, terminal values, and on and on. But what's the point in saying any of this? And what does it really have to do with Klaviyo?
The answer is everything. Your business is built on returning customer revenue. It may seem like it's built on growing revenue and acquiring new customers, but when all is said and done, your highest margin revenue is coming from the customers you've already acquired.
So here's the question that as a founder, operator, CFO, or marketing leader I encourage you to ask yourself next: if your entire DTC business is built on the assumption that the customers you acquire today will be worth more tomorrow, what are you doing about it?
If your agency isn't already talking about these, it may be time to start asking questions.
Here's a summary of the most important product updates and features announced during Klaviyo's most recent product livestream (and what they really mean for your retention strategy).
Most brands are already on board with the idea of “owned channels.” But what Klaviyo is building in 2025 is something deeper: a real attempt at orchestrating the entire customer experience, not just across email and SMS, but across your website, support, product, and data stack.
Here’s the key shift: it's no longer enough to run solid campaigns in each channel. Your website, your inbox, your transactional flows all need to talk to each other. They need to work in unison to serve a single, personalized journey.
Klaviyo’s latest releases reflect this exact philosophy:
At the centre of Klaviyo’s 2025 product evolution is a major transformation of the Klaviyo Data Platform (KDP).
This isn’t your standard CDP bolted onto a messaging tool. What Klaviyo has built is a real-time intelligence layer that not only collects and unifies data, but now activates it across every part of the customer experience, from marketing to service to on-site CRO.
Here’s what’s new, and why it matters:
For advanced analytics clients and agencies, this is a game-changer. You're not just looking at dashboards anymore; you’re embedding intelligence directly into the flow of data and triggering actions in real time.
This is the evolution of KDP: from passive data storage to proactive, intelligent infrastructure for customer experience. Less guesswork. Fewer silos. More relevant interactions at every stage of the funnel.
One feature that deserves way more attention (even from the Klaviyo team) is their new Custom Actions in Flows.
You can now trigger external events from within Klaviyo flows. Want to send an email based on the weather to customers in Austin? Deploy custom Python and Node.js code in your Klaviyo flow to call an API endpoint that fetches weather data and personalize it within your messaging strategy.
Need more inspo? Here's a short list of just some examples you can run directly inside of flows:
So, what is the common through-line in all of these updates and rhetoric?
Paid ads and new customers are the driving force behind building any brand. After all, there are no customers to retain without new customers being acquired. But building a brand profitably and sustainably in 2025 requires more than spending ad dollars to acquire new customers; it requires focusing on strategies that convert those new customers into high-LTV repeat buyers.
Customer experience is part of that strategy. Utilizing personalization, robust integration for better data and decision making, and deploying AI powered by first-party data for scalable customer insights and actions, brands can maximize the value of each customer and drive those incremental profit dollars to keep the growth flywheel spinning.
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