It used to be that marketers were heavily focused on customer retention. We all know the metric—it costs more to acquire a new customer than to retain an existing one. Hence, heavy focus on retention makes sense. But a new survey from Yieldify, based on the responses to 200+ marketers in the United States and the United Kingdom, say that despite the increased costs of customer acquisition efforts, their emphasis will overwhelmingly be on just that—acquisition.
Despite the oft-cited statistic that acquiring a new customer can cost up to 5x more than retaining an existing one, more than half of marketers spend 60% or more of their efforts on acquisition...even though the success of converting an existing customer is 60-70% versus 5-20% for a new customer (and we know it’s probably even lower in the world of e-commerce).
The rest of the survey, “The State of Customer Journey Optimization,” goes on to talk about customer journey optimization, which is what Yieldify does. But my interest here is on the 53% of marketers placing more than 60% of their effort on acquisition.
What’s behind this? If customer retention is so profitable, why the lopsided emphasis on acquisition? It wouldn’t make sense that marketers want to decrease their profits. So what is it? Is it that these marketers have automated their customer retention efforts to the point that they are on autopilot? So it’s not that they see retention as less important. It’s just that it takes less focus because they’ve got systems in place to handle it.
If this is the case, then this data is really more about the adoption of marketing automation than it is about customer acquisition vs. customer retention. It also means that, as a PSP or MSP, your marketing efforts may be best served by focusing on helping you customers with the part of their marketing they don’t have figured out—acquisition—rather than the part that they think they do.