The profit-first marketing playbook

The 6 moves your brand needs to survive the squeeze

Author

Pietro Saccomani
April 24, 2025

Let’s be blunt: it’s looking rough out there for ecom brands.

The profit squeeze has been on for some time. CACs have been rising, VC money has dried up, ROAS and margins are down. And that was before tariff fever.

From everything I’ve read, everyone I’ve talked to, it’s clear it’s not just fear-mongering. A lot of founders are really worried about what the future holds.

Ryan Peterson of Flexport claims thousands of small businesses are going to go bankrupt. Mike Beckham (Simple Modern) says “none of the numbers in our business work as a result of the trade war.”

The DTC newsletter surveyed 500 brands right after the tariffs landed; ~11% said tariffs could put them out of business (just 21% said the impact would be manageable).

41% of brands are pausing growth plans to deal with the impact of tariffs, while 71% of brands are planning to raise prices in response - which will have its own effect on growth (higher prices = less volume, lower turnover).

Thing is, cutting costs doesn’t have to mean pausing or stopping growth completely.

Of course, you can just cut every non-essential cost in your business… which might make you profitable again, but also pretty much ensures you’re not going anywhere in the future (even when market conditions turn).

But you don’t want to do that. If you’re smart about it, you can ensure you survive now, and thrive later.

We’re entering an era of lean, efficient, margin-led growth. That starts in marketing.

Retention Edge E02 w/Sabrina Wong (Head of UX Design, Tapestry)

In case you missed it, we launched the second episode of the Retention Edge podcast last week.

In this episode, Nihal discussed UX with Sabrina Wong from Tapestry (Kate Spade, Coach, Stuart Weitzman). We got to hear about her views on UX (not just from a brand perspective, but a customer’s as well), the mistakes she sees most often, and where she thinks UX is headed in the future.

Check out the episode below (or head to YouTube or Spotify and give it a watch when you’ve got a moment free):

The profit-first marketing playbook

Time to put growth to the side for now, and focus on profit. You need to stay in the game.

With that said, here are six moves to strip waste, drive efficient revenue, and keep your brand alive and thriving.

1. Cut tools you’re not really using

When times are good, you signed up for all kinds of marketing tools to look for an edge; analytics dashboards, customer data platforms, fancy email systems.

The reality is, a lot of these tools aren’t adding anything to your business, and cutting them won’t hurt your revenue (but will reduce expenses).

What to do:

Go through your tech stack. Ask:

  • Are we using this tool weekly?

  • Does it make us more money or save us time?

  • Can we replace it with something simpler or cheaper? (like AI-driven workflows)

Cutting even a few unnecessary tools can free up thousands a month, which is money you can put toward channels that actually drive revenue (or just reducing costs to get you closer to profitability).

2. Focus on owned channels (email, SMS, mobile app)

Paid ads are getting more expensive and less reliable. They’re still a great outlet for growth, but only if you have enough breathing room to absorb the lower (possibly negative) margins.

You shouldn’t turn off paid ads. But you need to make the most of high-margin owned channels like email, SMS and your mobile app (if you have one).

What to do:

  • Make sure you have key automated messages (welcome emails, abandoned carts, post-purchase check-ins) set up and optimized.

  • Send more emails, more SMS, more push notifications.

  • Audit and improve opt-ins on your website to grow your lists.

  • If you don’t have an app, consider launching one (an investment that actually grows revenue and profit).

With email, SMS and push, the cost to reach your customers is minimal, the margins on these sales much higher than with paid channels. This edge is crucial in times like these.

3. Treat customer retention like it’s a growth channel

It’s time to double down on retention. Just like with owned channels, repeat customers are far more profitable, much easier to market to.

What to do:

  • Set up post-purchase emails that educate and encourage a second order.

  • Create special offers or bundles just for past customers.

  • Make your subscription program smarter (e.g. letting people skip a shipment instead of canceling).

  • Build more touchpoints with past customers.

Even a small bump in repeat purchases can have a massive impact on your revenue and profit. Retention is your lifeline right now. Brands with dependable repeat revenue are the ones that can weather the storm.

4. Speed up your profit timeline

Yes, retention is where the margin lives. And yes, focusing on LTV is the right play.

But if it takes you 6–12 months to make back your ad spend on a customer, you’re in trouble.

That “eventual” LTV doesn’t help if your cash flow is bleeding now.

What to do:

  • Figure out exactly when you break even on a customer (is it the second purchase? Third?) and build a strategy specifically to get them to that point faster.

  • Use post-purchase emails, bundles, upsells, and personalized offers to drive that critical next order.

In an ideal world, you’ll be profitable on the first order. But if not, and you’re banking on LTV to pay off long-term, you need to speed up the timeline.

5. Rethink your offer and pricing strategy

Many brands rely heavily on discounting, whether it’s for conversions, or capturing emails/SMS/app downloads.

You may need to rethink this strategy to recover margins. Test other incentives, pricing approaches, AOV levers to increase the amount you keep from each sale, without doing a blanket price increase.

What to do:

  • Remove blanket welcome discounts, discount-based opt-in incentives (test non-discount incentives).

  • Test increasing your free shipping threshold to drive higher AOV.

  • Change the narrative around promotions; focus on increasing value rather than decreasing price.

Your pricing, promotions, and product mix directly affect whether your marketing makes money or just burns cash. Nail this, and everything else works better.

6. Kill friction. Convert more of what you already get

Many brands are losing potential customers not because of their ads or product… but because their site is confusing or slow.

So many ecom sites still have way too much friction; things like forced account creation, overly complicated checkouts, bad navigation.

To make more money right now, simply make it easier for people who are already on your site to buy from you.

What to do:

  • Use tools to watch where people drop off or get stuck.

  • Audit and simplify your checkout process (fewer steps, better mobile experience).

  • Make sure product pages clearly answer: What is this? Why should I care? How do I buy it?

Improving your site’s conversion rate means you get more sales from the same traffic, which means more profit (without scaling ad spend)

Quick recap: the 6 moves that matter

  • Cut unused tools → Save $$$ right away

  • Email, SMS & mobile apps → High-margin sales on autopilot

  • Retention flows → Turn one-time buyers into superfans

  • Profit timeline → Ensure profitability by 1st or 2nd purchase

  • Offer optimization → Better pricing, fewer discounts = more profit

  • Fix your funnel → Convert more of the traffic you already have

Final word: Switch gears. Become profit-first (for now)

It’s all well and good to be focused on growth. You don’t want your business to get stagnant. But right now, survival is the number one thing that matters.

It’s about lean, smart growth. Making every marketing dollar count.

You might need to dial back on expensive, speculative marketing channels, and focus more on dependable, high-margin channels.

You might not grow as fast as you did last year, but at least you’ll stay in the game. That’s what’s important right now.

When things turn around, you’ll be able to go back to high-growth strategies. But that agility is what separates brands that last, from brands that shine bright and burn out. Being able to pivot depending on what the market requires at that point in time.

For now, focus on cutting waste (unnecessary expenses, lost sales due to friction and over-discounting) and squeezing more out of the profit centers of your business (retention & owned channels).

Let’s get to work.

Quick Hits

Shopify Checkout + LLMs

Everyone’s talking about the code leak suggesting that Chat GPT will soon let people buy products inside chats.

This could potentially be one of the biggest shakeups to the online shopping experience in some time.

How to Make Tariffs Work

The majority of people (especially those with the nose to the ground in retail & ecom) think the tariffs (as they’re set up now) don’t work. That the negative impact outweighs the intended benefits.

Sean Frank (Ridge) suggests a 5 step plan to make it work.

Shein & Temu Announce Price Rises

Both discount retailers have officially announced that prices are going up in the wake of the de minimis changes and tariffs.

As of April 25, it will be more expensive to shop on these sites for US consumers, which feels like a death sentence (for their US business, at least) for two brands who were built on a model of offering products at basement-level prices.

Temu Ads & App Rank Are Plummeting

As they start pulling their US ads, Temu has fallen (almost overnight) from one of the biggest online retailers in the US to the middle of the pack.

Data shows the sharp decline in Google Shopping Ad share, as well as their app rank (previously the most downloaded app in the US App Store).

How to Raise Prices (Without Losing Customers)

A very relevant piece today. Increasing prices is the natural reaction to the introduction of tariffs, but there's a lot of risk in this.

This article in Vogue Business gets an idea of how several major brands are approaching the tariff fiasco, and trying to stay alive without alienating their loyal customer base. Well worth a read.

App Exclusives: A Margin-Preserving Retention-Driver?

The default incentive most brands use to get in a position to drive long-term loyalty (getting customers on their email & SMS list, incentivizing app downloads) is to offer a discount.

But that’s never been ideal. And brands will be even more protective of margins now, looking for better alternatives to reward and nurture repeat buyers.

Our latest article looks at app-exclusive product drops, and how this strategy (and building a sense of exclusivity in general) may be just what you need at a time when retention revenue is becoming more and more important.

31 AI Tools for Your Marketing & Advertising Workflows

Are you using AI in your business yet?

Just about every brand is, more than likely, using some kind of AI tool. AI can do amazing things for your workflow, and potentially ease some of your burden right now by lowering operating costs for marketing & advertising.

If you’re looking for more ideas for tools to help you get more done in less time, we put together this bumper guide of AI-driven tools for DTC teams. If there’s any AI tool you love that we left off, reply to this and let me know!

3 Biggest Mistakes from Simon Beard (Culture Kings)

Simon Beard built Culture Kings from the ground up. And as any entrepreneur knows, growth doesn’t come without a host of mistakes along the way.

He talks about the three biggest mistakes he made - listening to the wrong people, focusing on the wrong metrics, and personnel mistakes. Give it a read and see if it resonates for you.

The Average Amazon Shopper Spent $2,817 Last Year

In this edition of “stats I can’t believe are true”, Amazon reportedly averaged nearly $3k revenue per customer in 2024.

That’s why they’re the kind of retention. 99% of Amazon shoppers buy again. The average shopper makes 73 purchases a year.

If you’re ever unsure about what to do in terms of retention & CX, just go to Amazon’s website and see what they do. It’s usually a pretty good bet that it works.

That’s all for now.

I’ll be back same time next week, with more insights on CX and retention marketing, and how to weather the tariff storm.

Remember to check out our new podcast on Spotify and YouTube, and give it a like/comment/sub if you found our conversation with Sabrina useful.

Until next time,

Pietro and The Retention Edge Team