Customer Acquisition Is Not The End Of The Road! Know Why?

By Author: Bhushan
Total Articles: 6
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Marketing investments are allocated in a way that helps a business achieve the highest ROI and maximize value for your brand.

Pretty obvious, right?

But you could be wrong!

A recent report from Salesforce explored the value of customer lifecycle marketing and shared some interesting insights below-

1. Only 20% of organizations used marketing across the entire customer lifecycle.
2. An average of 88% of the budget for customer lifecycle marketing goes to awareness (top-funnel) strategies.
3. Companies spend 2x as much on marketing to a new customer than to existing ones.

Almost every marketer would agree that nothing turns them on more than acquiring a new customer.

This is evident in the way marketing budgets are utilized.

It’s both shocking and surprising to note that less than 9% of marketing budgets are allocated for marketing to existing customers (Percentage of budget spent on Email Marketing in the above graph).

The growth of Facebook and Google over the past decade clearly shows how obsessed marketers are with the acquisition.

After all, ...
... these are the big daddy channels for acquiring new customers or for generating leads.

Similarly, the usage of campaign management platforms clearly reveals where the focus is on 61% of marketers use it for lead generation.

Another example-as marketer, we all use analytics. But how many of us use analytics in our transaction portals vis-à-vis marketing portals and use the insights to market to our existing customers?

Maybe just a few.

This clearly shows that a majority of marketers are obsessed only with acquisition and very little attention goes into marketing to existing customers.

However, marketing does not equal acquisition.

While there is no doubt that customer acquisition is the lifeblood for any organization, you shouldn’t forget that your existing customers are a gold mine.

The survey says,

• You have a 60% to 70% chance of selling to an existing customer, whereas you only have a 5% to 20% chance of selling to a new customer (Marketing Metrics)
• 25% to 40% of the total revenues of the most stable businesses come from returning customers
• And repeat customers drive 3x-7x the revenue per visit as one-time buyers (Source)

We do not recommend avoiding investing in acquiring new customers, however, we simply suggest investing more in existing customers to get more returns.

Now we know how most of the businesses are losing their valuable marketing spends by focusing more on customer acquisition. We can, however, turn the tables and get more returns by investing in your existing customers instead.

Let’s find that out in our next article.

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I'm Ken Adams and I love to write Marketing Technology related articles!