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A Survey of B2C Marketing Executives Reveals They Allocate Most of Their 2023 Budget to Costly Acquisition Versus Retention

As marketers deal with unpredictability in consumer spending, rising market costs, and the need to deliver better ROI on marketing efforts, our survey reports on how marketers are grappling with this crucial question. The survey also explores other key topics like automation, personalization AI, challenges in adopting new technologies, leveraging first- and zero-party data, benefits of customer-led marketing and more.

Our May 2023 survey of marketers shows that for the second year in a row, respondents continue to allocate more of their budget for acquisition marketing versus retention marketing, despite consumer spending uncertainty, and that new customer acquisition can cost five times more than retaining an existing one. 

Respondents were marketing leaders:  Respondents included 221 executives at companies with the following B2C models: digital-first multi-brand, wholesale manufacturers, traditional multi-brands, digital-first direct-to-consumer, and traditional direct-to-consumer retailers with brick-and-mortar outlets. Respondents included CEOs, CMOs, and SVPs of marketing.  

The results revealed that 54% allocated more than half their marketing budget to new customer acquisition, versus 13% allocated more than half their budget to customer retention. The remaining 33% of respondents said they split the acquisition/retention budget equally. The Optimove 2023 Survey of B2C Marketers was designed by Optimove and fielded by Survey Monkey in the second quarter of 2023. Read the full report here

A core issue, many marketers lack a first- and zero-party data strategy: The results also showed that almost half of the marketers (49%) do not have a strategy for collecting zero-party data, while 42% do not have a strategy for first-party data.  

Reaching/identifying relevant customers remains a top challenge: Respondents ranked these as the top two challenges in acquisition marketing: 

  • reaching relevant customers, and 
  • delivering personalized experiences to top prospects  

In addition, respondents noted the top challenge in retention marketing is identifying valuable customers to invest in. 

Other highlights: 

  1. The marketing tactics that deliver the most bang for the buck: retention/churn prevention and increasing Customer Lifetime Value (CLV). 
  1. The costs of acquisition and retention marketing are up.  
  1. Marketers are increasing digital marketing spend, especially for scaling personalization to improve retention. 
  1. Respondents say that quick response time is key to deepening customer relationships. To do so, the top priority for marketers is detecting, prioritizing, and executing responses to real-time events, which deliver the highest value when optimized. 
  1. The survey noted that the top marketing mistakes in customer outreach that negatively impact the brand are a) too many messages causing marketing fatigue and b) conflicting messages and promotions across different channels. 
  1. Most marketers, eighty-eight percent (88%) increased the percentage of, or are planning to, their automated marketing campaigns to deliver more relevant personalized messages. 

To optimize your retention marketing, start with the customer 

Our conclusion from this survey is that marketers understand they must deliver a continually improving personal experience for all customers, yet many still need the core insights from first- and zero-party data. 

While marketers said retention marketing and increasing customer lifetime (CLV) would deliver their companies the highest impact and growth, most still budget more for acquisition. 

However, customer-led retention marketing can also provide the best roadmap for acquisition marketing if brands are informed by zero- and first-party data. A company should seek new customers who match the profile of the brand’s most valuable customers. Retention marketing can then guide an efficient acquisition strategy. 

A customer-led marketing program is critical in the uncertain economic environment of consumer spending. 

If you want to discuss your retention program, contact us. 

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Rob Wyse

Rob Wyse is Senior Director of Communications at Optimove. As a communications consultant, he has been influential in changing public opinion and policy to drive market opportunity. Example issues he has worked on include climate change, healthcare reform, homeland security, cloud transformation, AI, and other timely issues.