According to a survey, 54% of respondents spend more than half of their marketing budget on acquisition, compared to 13% who spend more than half on retention.
Despite the uncertainty surrounding consumer spending and the fact that acquiring a new client can cost up to five times as much as keeping an existing one, marketers continue to devote a larger portion of their budgets on acquisition marketing than retention marketing.
The data came from a survey of 221 marketing executives who work in business-to-consumer (B2C) marketing. It was shown that 54% of respondents spent more than half of their marketing budgets on acquiring new clients, while only 13% spent more than half on keeping existing clients. The remaining 33% of respondents claimed to have equally divided the budget for acquisition and retention. In the second quarter of 2023, Survey Monkey conducted the Optimove 2023 Survey of B2C Marketers on their behalf.
The results of the Optimove 2022 marketers survey show little to no change from the 2023 outcomes: 52% of respondents indicated they spent more than half of their money on customer acquisition, 15% on customer retention, and 33% said they divided it equally.
The findings are characterised as flat consumer spending. The U.S. Federal Reserve’s April 10 Beige Book Report stated that “consumer spending was generally seen as flat to down slightly amid continued reports of moderate price growth.”
Additionally, the trends from three previous Optimove polls demonstrate the unpredictability of customers’ intended buying budgets. Consumers anticipated increasing their expenditure in August 2022 by 19%, February by 14%, and March by 22%.
Despite the fact that respondents still spend more money on acquisition than retention, they claim that two marketing strategies—retention/churn prevention and growing customer lifetime value (CLV)—deliver the best return on investment. The majority of respondents (28%) did state that allocating more marketing funds on retention, customer-led marketing, and boosting CLV will have the biggest positive effects on their businesses’ growth. Comparatively, 13% of marketers believed that gaining new clients would have the greatest influence on the company’s bottom line.
“This survey reveals that marketers know that retention marketing delivers a better ROI than acquisition marketing. But, there are issues that could hold marketers back from shifting more budget to customer-led retention marketing. Many have some difficulty adapting new technologies that drive deeper connections and personalization to their consumers. Of note is that many marketers still need a crucial core ingredient to highly effective retention marketing: optimizing first- and zero-party data to create highly personalized experiences for customers.”
Pini Yakuel, CEO, Optimove
The findings revealed that 42% of marketers do not have a strategy for collecting first-party data, while 49% of marketers do not have a strategy for obtaining zero-party data.
“For marketers, making a sharp pivot from acquisition to retention marketing – starts with deep, real-time analytics of first- and zero-party customer data. It is executed with real-time, personal communication with each customer. It is critical to rely on marketing to a known customer in the face of consumer spending uncertainty.”
Pini Yakuel, CEO, Optimove
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