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Brands, Stop Re-acquiring the Same Customer!

We mention this from time to time, but marketers? They feel it all the time: the Cost of Acquisition is a one-way street going up a never-ending hill. Then why do many brands pour fantastic amounts into remarketing, attempting to re-acquire the same client again and again?

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As consumers, when the price of a product we love, say shampoo, keeps going up, do we continue to buy it? If we can afford it, maybe. But logic has it we would look for an alternative and find something just as good, or better, that doesn’t burn a hole in our pockets.   

That is certainly not the case with many brands’ new clients’ acquisition fixation. Running with that metaphor, marketers continue to buy the same overly expensive shampoo, but instead of using it, they just buy the same one the next day.  

It’s becoming increasingly expensive to get a client on board, and what do many brands do once they do? Attempt to acquire them again using remarketing. It’s fair to say that we as marketers aren’t doing ourselves any favors.   

No need to look very far to find the evidence here. According to “The State of Fashion Technology,” a new McKinsey & Company and The Business of Fashion report, the global average CPM on Facebook has increased by almost 17% yearly since 2018. The report states what many marketing leaders have been saying for years: acquisition marketing’s inherent math breaks, guaranteeing prices to spike, and new data privacy regulations are causing online advertising’s efficiency to decrease further.  

Recently, I listened to Optimove CEO & Founder Pini Yakuel discuss this matter on an Israeli eCommerce podcast. This one line got me thinking: “Companies that don’t focus on retention end up re-acquiring their customers over and over again.” It’s like a party that keeps welcoming the same person repeatedly, never showing them to the bar.   

Then, I attended the leading conference for all things CRM Marketing, CRMC, in Chicago. I listened to marketers complain about spending huge budgets on remarketing strategies under the assumption that the “retargeted individual was always one nudge away from buying their product.” Just to clarify, they use this same strategy regardless of who that potential customer is. To further clarify, this 5-ton hammer approach completely disregards this person’s previous actions. Should the same method be used for a loyal customer with a high lifetime value and a potential customer that has never purchased?  

Like a weird indie sci-fi film, these brands are basically re-acquiring their customers and spending brutally large amounts at that. For each dollar that goes into retention, two go into acquisition, and we’re talking best-case scenario. If that makes no sense to you, we’re in agreement. Why would the fact that more money goes into acquisition lead companies to re-acquire customers instead of simply retaining them?   

With lower budgets comes reduced company resources; CRM marketers need to employ more creative marketing, which isn’t easy. While acquisition marketers have an easier job, they use that hammer across the board and wait. Results may come, but at what cost?  

Another reason is those dreaded marketing silos. Many brands have a disconnect between the acquisition and retention teams, having different goals, meetings, data, and plans… You get the picture. Merging those teams would mean marketers could look at one data set and work off one plan and goals. This way, they can focus on retaining existing customers, not re-acquiring them at a tremendous, unnecessary cost.   

To be clear, I’m not advocating more budget for CRM/retention/loyalty teams, just that the basic approach to customer marketing is off. This “new” approach is actually aligned with your goals and isn’t wasteful: to acquire the best customers, retain them the longest, and create the most customer equity possible.   

And once that happens, I promise you will stop “re-acquiring” customers. 

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Rony Vexelman

Rony Vexelman is Optimove’s VP of Marketing. Rony leads Optimove’s marketing strategy across regions and industries. Previously, Rony was Optimove's Director of Product Marketing leading product releases, customer marketing efforts and analyst relations. Rony holds a BA in Business Administration and Sociology from Tel Aviv University and an MBA from UCLA Anderson School of Management.