If attracting a new customer costs five times as much as keeping an existing one, why is new customer acquisition a growing focus?
When customers are taken for granted, they have a knack for vanishing. So it seems strange that as we move into an era of vanishing, or at best, shrinking marketing budgets, attention paid to existing customers appears to be eroding.
I recently asked Lana Busignani, EVP of US Analytics at Nielsen, to shed light on recent research which reflects the waning importance of marketing built to keep current customers active and engaged.
Paul Talbot: Survey respondents indicated, by a fairly wide margin, that acquiring new customers was more important than retaining existing customers. Do you have a sense as to why?
Lana Busignani: One potential explanation is the distortion of attention and energy to mastering the capabilities being enabled by the digital, addressable world. The growth and sophistication of the digital advertising ecosystem has enabled marketers to target audiences and buyers more precisely with the objective of converting interested/engaged buyers within the category to their brands.
Talbot: Little interest was expressed in reducing churn. The report states, ‘This lack of focus on churn is a missed opportunity for marketers.’ Can we quantify the size of this opportunity, and why doesn’t the tactic of reducing churn generate the focus you believe it should?
Busignani: Perhaps some may be chalked up to how marketers define churn, whether they are concerned with it or not.
