We asked 66 retention marketing agency owners in the Shopify & Klaviyo ecosystem how long they retained their clients, why they churn and how they’re using AI in their agency’s everyday. The answers shocked us.
It’s time to dive into the State of the DTC Retention Agency 2025 Report!
further in depth reading
This is a collection of articles that will provide you with more information about our FREE email marketing course.
How happy are email marketing agency owners?
First, let’s take a look at general happiness levels across the agency landscape.
Agencies are notorious for being some of the most gruelling businesses to scale and run due to intensive service demands from clients.
How did our survey respondents feel about what it’s like to run their business day-to-day?
Surprisingly, most seem relatively happy!
If I had to hazard a guess as to why this is, speaking from personal experience, I’d say: despite the mental toughness and long hours that come from owning your own agency, there’s no greater feeling than being in control of your own destiny. That in itself brings an immense level of satisfaction to your life, irrespective of how unforgiving this industry can be.
How busy are email agency owners?
Next, we wanted to understand how people rated their current workload. Unsurprisingly, lots of people are stretched thin:
Just one respondent said they had plenty of free time during their working hours. Since the answers were anonymised, I don’t know who that agency owner is - but I’d love to meet them and find out the secret sauce!
How do agency owners rate the quality of the service they provide to clients?
We were also intrigued to see just how highly agency owners rank their level of service delivery to clients.
As you can see below, very few people consider that their agency delivers poor quality work - quite the opposite of the noise that pollinates social media about email agencies being ‘trash’.
What’s my personal opinion on this?
Despite the social media narrative, I have, in recent years, seen a dramatic increase in the quality of work delivered by competitor agencies through accounts I have audited for Magnet Monster. I believe this change has been driven two-fold:
- As the marketplace has matured, client expectations have gone up significantly. Things like templated flow setups and revenue share agreements still happen, but they’re less common due to education and expectations having increased brand-side.
- As Klaviyo matures as a platform, the amount of people experienced with its software has gone up proportionally. I remember when starting out, how difficult it was to find email marketers with experience. These days, you can comfortable find people with at least 3 years of experience within Klaviyo at reasonable rates, and many people with 5+ years of experience. This results in more educated marketers working on client accounts.
How long do email agencies retain clients?
Next, we were keen to see how long agencies retain their clients. There was a real mixed bag in this regard:
I was pleasantly surprised by how many agencies retained clients for 12 months +. At Magnet Monster, we’ve had several clients stay with us for over 4 years, but we’ve also noticed in the last year how many businesses have churned due to cashflow issues or moved things in-house to save money. Which brings us onto the next question: “What is the most common reason your agency loses clients?”
This was an open-ended question, and here’s what Gemini summarised the commonalities in the responses as:
- Clients taking services in-house: This is the most common reason, with many clients opting to manage operations themselves or hire dedicated internal resources.
- Financial and budgetary issues: Clients often cease services due to cash flow problems, budget cuts, or their business failing.
- Lack of results or perceived value: Clients discontinue services if they don't see sufficient revenue, business impact, or value beyond the return on investment.
- Misaligned expectations or communication issues: Discrepancies between client expectations and actual outcomes, or poor communication from the agency, can lead to client loss.
- Agency capacity and internal issues: Overloaded account managers or designers, leading to an inability to manage the scope of work or a lack of proactive client engagement, can result in client churn.
None of this should be surprising, of course, and mirrors my own experience.
How do email agencies structure their teams?
It was a really fascinating, mixed bag in this regard, and we saw probably every single permutation you could fathom.
What has become apparent, however, was the desire to move towards leaner team structures due to the rise of AI to drive more ownership across role players within the business.
Here was Gemini’s summary of the answers we received:
- Core Team Structure Many agencies utilize a core team of Strategist/Account Manager, Designer, and Copywriter. Some also include a Project Manager and/or Email Builder/Implementer.
- Specialized Roles Several responses highlight specialized roles such as Email Technicians, Klaviyo Experts, QA specialists, Data Analysts, and Marketing Specialists.
- Pod System A significant number of agencies organize their teams into "pods" or dedicated client teams, often consisting of a lead strategist, designer, and copywriter, managing a specific number of clients.
- Consolidated Roles In some cases, individuals wear multiple hats, with strategists also acting as project managers, copywriters, or even handling email implementation. Some small agencies or one-person operations cover all roles.
- Challenges Common challenges include client approval delays, the high workload for account managers, and the potential for chaos if capacity is overloaded.
And how about the pitfalls of the way these agency owners set up their teams in regards to delivering results for clients? Again, here’s Gemini to summarise the answers:
- Communication & Collaboration Challenges: Frequent issues include unclear processes, slow information relay, working in silos, and difficulties in inter-departmental communication, leading to bottlenecks and delays.
- Capacity & Resource Management: Challenges stem from teams being overloaded, understaffed, and experiencing difficulties in scaling and managing fluctuating client needs.
- Client Management & Expectations: Issues arise from clients not responding in time, not meeting deadlines, being overly involved, and a misalignment of expectations.
- Team Skill & Performance: Difficulties include ensuring consistent work quality, developing strategic skills among account managers, and reliance on key personnel, where a weak link can affect overall performance.
- Profitability & Efficiency: Concerns exist around expensive setups, needing to charge high fees, and challenges in profitably delegating tasks and managing project costs, especially with multiple people involved.
My personal opinion on this: it’s far less about SOPs and team structure than you think. What stops clients from getting results is either one of two things:
- You don’t have the right team members set up to get the client results
- Clients get in their own way and enforce bloated rules and systems, which slow everyone down
Who is responsible for handovers and project handoffs between departments?
This was a big one and was fascinating to see just how many agency owners are still heavily involved in operations.
Here’s Gemini’s summary of the answers:
- Dedicated Roles: Project Managers, Account Managers, and Strategists are frequently responsible for ensuring smooth project handoffs, with some agencies having specific onboarding or operations departments.
- Owner Involvement: Agency owners, CEOs, or founders are often involved in overseeing handoffs, particularly in smaller or newer agencies.
- Process Efficiency: While many respondents report smooth handoffs, common challenges include slow lead times, communication gaps, lack of context in notes, and issues with resource contention.
- Tool Utilization: Tools like ClickUp and Notion are mentioned as contributing to smoother handoffs.
- Team Collaboration: Strong teamwork and the preparation of detailed notes are highlighted as crucial for successful transitions.
How much is AI being used in email marketing agencies?
The big one we’re all intrigued by.
The thing that shocked me the most? Surprisingly, AI seems to be used very little compared to what I expected and primarily for copywriting.
Why is this?
Honestly, I don’t know. Probably a combination of people working inside the agency being so constrained by the day-to-day tasks that they aren’t able to allocate time efficiently to learning new tools and skills. But surely that’s also one of the most advantageous ways to learn and adapt new tools into your processes, by getting your hands dirty? It doesn’t appear so, when analysing the majority of the answers.
Speaking of which, here’s the AI summary:
- Copywriting: Many respondents use AI for creating, proofreading, and generating copy for various email elements like subject lines, preview texts, headers, body paragraphs, and CTAs. Some even train AI to write in a client's authentic voice.
- Strategy & Ideation: AI is utilized for campaign strategy, ideation, analyzing data to develop flow strategies, brainstorming offers, and generating campaign ideas and calendars.
- Data Analysis & Reporting: AI assists in analyzing reports, crunching data, interpreting analytics, and providing quick insights.
- Operational Efficiency: AI is used for creating SOPs, building custom prompts, and automating tasks like generating monthly email campaign calendar instructions.
- Limited/No Usage: Some respondents reported minimal or no use of AI, or that they are still exploring ways to integrate it into their operations.
It’s important to stipulate that most of these tasks were done manually, and not automated by agents, which suggests we still have some way to go before AI fully encompasses agency operations at scale.
What’s 1 thing your agency could improve to make your life easier?
Let’s finish on a fun question.
Unsurprisingly, most people said a combination of better processes, less workload, and more training for staff to improve output - all things agency owners tend to deprioritise as they focus on marketing and sales more than client fulfilment when growing.
Here’s the AI summary:
- Workload & Efficiency: Many respondents mentioned the need to lessen individual workload, improve task management, automate processes, and ensure fair distribution of tasks.
- Process & Standardization: Several responses highlighted the need for more defined systems, standardized workflows (especially for email and client onboarding), and clearer SOPs.
- Talent & Training: Responses indicated a need for better hiring processes, upskilling junior hires, training designers/Klaviyo techs, and increasing the overall competence level across team members.
- Client Management & Acquisition: Improving client filtering, acquiring higher quality/bigger clients, enhancing lead flow, and better client management were recurring themes.
- Accountability & Communication: Respondents expressed a desire for better personal and team accountability, transparent communication with clients, and fewer internal meetings.
