SMBs Devoting More Marketing Dollars to Customer Acquisition Than Retention

March 1, 2013

This article is included in these additional categories:

Local & Directories / Small Biz | Promotions, Coupons & Co-op

BIAKelsey-SMB-Marketing-Budgets-Customer-Aquisition-v-Retention-Mar2013More than one-third of SMBs say they devote the majority of their marketing budgets to customer acquisition, while just 6% say they devote the majority to customer retention, per results from a new BIA/Kelsey study. The researchers argue that the greater share of spending being devoted to customer acquisition programs may be a result of buying habits rather than preference. Indeed, the study also finds rising interest in loyalty programs, which could cannibalize some dollars from customer acquisition programs.

About one-third of the SMBs surveyed in Q3 2012 said they currently had a customer loyalty program in place, while another 1 in 5 said they would likely implement one in the following 12 months. Combined, that means that 55% of respondents had – or envisioned having – a program in place, compared to 43.3% who did not have such a program in place and were unlikely to introduce one.

The study also examines planned usage of daily deals, finding that roughly half of the merchants surveyed planned to participate in a deal in the following 6 months. In fact, BIA/Kelsey projects that deals revenues will grow from $3.6 billion last year to $5.5 billion in 2016, with strong growth this year (to $4.4 billion).

About the Data: The BIA/Kelsey survey sample size is 300. The survey was conducted online and may not be statistically significant. The deals forecast is based on the value of total consumer purchases of deals, not just the revenue share with the deals companies.

The study defines “loyalty marketing” as: “Specific efforts to acquire, engage and retain customers. It can target specific customer groups based on their search interests and purchase patterns. Loyalty marketing utilizes techniques that include frequent shopper clubs and memberships, email and print newsletters, social media programs, special events, discounts and coupons, custom content, gift cards, and gift certificates.”


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