OneSignal has released its State of Customer Messaging in 2023 report, a survey of more than a thousand marketers and other professionals about the strategy changes their companies are making to “improve ROI and retain their competitive edge.”
For starters, 82% agreed that the recent economic downturn caused their company to focus more on reducing marketing and product spending, with 88% saying their marketing and engagement strategy had to be adapted in 2023. “As budgets are reexamined with a fine-tooth comb,” the report says, “marketing spending is often one of the first areas to be reduced or scrutinized.”
The trend, as OneSignal’s study discovered, is one we should all know better about.
“During the 2008 financial crisis, studies by Bain & Company found that companies that maintained or increased their customer acquisition spending during the downturn actually experienced lower growth rates than companies that reduced their acquisition spending and instead focused on customer retention,” the report says (emphasis theirs). “That same trend was echoed in our State of Messaging Survey. Despite the fact that most respondents acknowledged the need to adjust their marketing and engagement strategies for 2023, the majority of them still allocated more resources toward customer acquisition rather than retention.”
In fact, respondents said 42.9% of their company resources are allocated more towards customer acquisition; 28.5% were allocated toward customer retention, and 28.6% was equal amounts towards both.
“This data suggests a missed opportunity for companies to focus on building strong, long-term relationships with their existing customers rather than focusing on acquiring new ones,” the report says.
“Studies show that acquiring a new customer can cost five times more than retaining an existing one. Building and maintaining customer loyalty can be more cost-effective in the long run, as repeat customers often require less marketing spend to retain and can provide more value over their lifetime.”