Why CMOs are prioritising retention over acquisition
We keep chasing quick wins. And although flash sales, aggressive acquisition campaigns, and viral moments might generate impressive short-term metrics, the most successful CMOs understand a fundamental truth: it is time to prioritise retention over acquisition.
The shift towards long-term brand equity
If there's one thing we know for sure, it's that brands built on short-term wins rarely last. The CMOs leading the charge this year are instead focusing on long-term brand equity.
Recent data supports this approach, with marketing budgets increasing to 7.7% of revenue, with significantly more allocation towards customer retention initiatives.
The mathematics behind prioritising retention are compelling:
Acquiring a new customer typically costs five to seven times more than retaining an existing one
Increasing customer retention rates by just 5% can boost profits by 25-95%
Existing customers are 50% more likely to try new products and spend 31% more compared to new customers
But beyond the numbers, retention marketing creates a community of brand advocates who provide consistent revenue and organically expand your customer base through recommendation, something acquisition simply can’t.
The importance of omnichannels
When you can create seamless experiences across email, SMS, social media, and even physical stores, you make sure that you are a constant in your customers' lives.
Let's look at how leading brands are leveraging different channels:
Email marketing: the relationship builder
Email remains the backbone of retention marketing, offering unparalleled ROI when done properly. The most effective email programmes have evolved beyond promotional blasts to include:
Personalised content based on purchase history and browsing behaviour
Educational material that adds value beyond products
Behind-the-scenes glimpses that foster emotional connection
Milestone celebrations and loyalty rewards
SMS: the immediate touchpoint
With open rates exceeding 98%, SMS provides direct access to customers' attention. Best practices include:
Time-sensitive offers and reminders
Order updates and delivery notifications
Exclusive "text-only" promotions for opted-in customers
Quick feedback collection
Social Media: the community
Social platforms excel at fostering brand communities and delivering authentic content. Leading brands use social for:
User-generated content campaigns
Live events and Q&As with team members
Addressing customer service queries publicly
Showcasing brand values and initiatives
Physical retail: The showcase
Even in our digital world, brick-and-mortar locations remain powerful for creating memorable brand moments:
Product demonstrations
Exclusive in-store events for loyal customers
Click-and-collect services bridging online and offline
Staff trained to recognise and reward returning customers
Omnichannel brilliance
We create symphonies when these channels work in concert. Consider these powerful combinations:
Email + SMS: Send an email featuring new collection items, followed by an SMS alert when stock is running low on items a customer has viewed.
Social + Physical: Host an in-store event that generates social content, creating FOMO and driving both online engagement and future store visits.
Email + Social: Use email to promote user-generated content campaigns, then showcase submissions across social platforms to build community.
SMS + Physical: Send location-based text alerts when loyal customers are near your shops, offering personalised recommendations or exclusive in-store promotions.
Have a look at your budget
The increase in marketing spend to 7.7% of revenue reflects growing recognition of marketing's strategic importance. Within these expanded budgets, we're seeing marked shifts:
Greater investment in customer data platforms and personalisation technology
Increased allocation for content creation that serves existing customers
More resources devoted to loyalty programmes and retention specialists
Enhanced analytics capabilities to measure customer lifetime value
Alignment = longevity
Building a brand takes time, strategy, and careful consideration. The most successful CMOs understand that meaningful storytelling, consistent value delivery, and genuine customer relationships are the foundations upon which enduring brands are built.
As we move through 2025, the brands that will thrive are those viewing each customer interaction not as a transaction but as an investment in a long-term relationship.