In the last two decades, businesses have been able to attract new customers through the internet like never before. It’s a whole new world out there! But what does that mean for your business?
Few things are more important to business leaders than customer acquisition. The more potential clients a company can attract to their products or services, the faster that organization will grow. Unfortunately, successfully capturing new leads is rarely a straightforward process.
Customer acquisition statistics demonstrate the process of finding and converting customers is growing increasingly complex. Between 2014 and 2019 alone, the cost of acquiring customers increased by approximately 60%.
Marketing strategies are growing increasingly expensive, and customer trust in brands is dropping. An evaluation of the latest customer acquisition statistics below shows companies have a number of challenges to overcome in finding, converting, and retaining customers.
Customer Acquisition Statistics
One of the most stressful things about running a business is growing your customer base. Customer acquisition is never easy. But don’t worry—you’re not alone.
If you’re like me, sometimes you just want to see some hard facts about how others have done it.
These customer acquisition statistics provide insight into the current state of customer acquisition and how you can use it to your advantage.
1. 44% of companies focus more on customer acquisition than retention
An Infographic from Invespcro.com indicates the focus on customer acquisition in today’s business landscape is still a lot higher than the focus on retention. Around 44% of companies rate acquisition as the most important goal for their marketing and sales teams.
In contrast, only around 18% of companies from the report said they put customer retention first on their list of goals. Despite this, the report also shows that around 76% of companies consider customer lifetime value to be an important concept for their organization.
Customer Lifetime Value, or CLV is greater when a company focuses on retaining clients for long-term and repeat purchases. Unfortunately, only 42% of companies say they’re confident they can measure CLV accurately.
2. Digital customer acquisition methods are higher than ever in 2022
The global spend on digital marketing solutions for customer acquisition is increasing in 2022, according to the latest report from Zenith Media. According to the analysts’ latest report, advertising across all digital channels will exceed 60% of all global ad spend by the end of 2022. By 2024, the global ad spend on digital strategies will reach 65.1%.
The research, which suggests the value of global digital ad spend will reach around $873 billion in 2024, suggests companies are becoming more reliant on digital tools for customer acquisition.
Zenith media notes ecommerce surges and changes in customer shopping habits following the pandemic has disrupted the customer acquisition market. Consumers are spending more time online, which makes digital customer acquisition more important.
3. 81% of customers trust family and friend advice over business advice
The HubSpot Customer Acquisition study suggests it’s becoming increasingly difficult for companies to convince customers to convert in a time when brand trust is low. Around 55% of customers in the report said they no longer trust the companies they buy from as much as they used to.
65% of respondents in the study said they don’t trust company press releases, while 69% said they don’t trust advertisements, and 71% don’t trust sponsored ads on social networks.
The best way to acquire customers, according to Hubspot is through word of mouth, as 81% of consumers trust their friends and family members to provide useful insights.
4. Cost Per Acquisition (CPA) for Google Ads is lowest in the automobile industry
(Flying Saucer Studio)
While customer acquisition costs seem to be on the rise everywhere, reports from the Flying Saucer studio indicate some companies experience lower costs than others on Google Ads.
The report shows Google Ads deliver customers an average 200% return on their investment; however, the price of this investment can be extremely high. Automotive companies had the lowest CPA at only $33.52 per person, while the tech industry spends an average of $133.52 per person on acquiring customers.
The industry with the lowest cost per acquisition changes drastically depending on the platform. Education had the lowest CPA on Facebook at $7.85 per customer, compared to technology at $55.21.
5. Companies that align sales and marketing save 30% on acquisition costs
(Nashville Analytics Summit)
In 2018, the Nashville Analytics Summit revealed aligning sales and marketing teams is often a crucial part of reducing the costs associated with customer acquisition. The research revealed tightly aligned organizations saved up to 30% on their customer acquisition costs.
Not only were aligned organizations more likely to reduce the costs of acquisition, but the customers they earned had a 20% higher lifetime value on average.
6. 52% of customers expect offers to always be personalized
According to Salesforce, an important part of gaining customers today is providing them with a personalized experience. Around 52% of customers expect offers to always be personalized when they encounter a sales or marketing effort.
Customers are also expecting companies to show more empathy in their customer acquisitions strategies. 68% of clients only want to buy from brands who demonstrate empathy, and around 66% of customers say they want brands to understand their unique needs and expectations.
7. 90% of Americans use customer service as a factor when deciding to do business with a company
The Global State of Customer Service study conducted by Microsoft Dynamics 365 revealed customer experience is important to both customer acquisition and retention. 90% of the Americans surveyed in the report said that customer service is important to their choice of which brand to buy from, and their future loyalty to the brand.
The same report showed if companies could not live up to expectations for positive customer experiences, 58% would not hesitate to end their relationship with that brand. Around 55% of customers also say they expect customer service to get better the more time they spend with the company.
8. 80% of companies believe technology helps to improve customer acquisition
The ActiveCampaign 2022 Customer Experience Autoamtion Impact study revealed automation and similar disruptive technologies could be crucial to improving the acquisition and customer retention rates for companies long-term. According to the study, automation allows companies to achieve up to 110% more leads and a 94% higher rate of conversions.
Companies implementing CXA in the study said they were able to generate half of their revenue from current customers and expect to double their revenue in the next year with the use of automation.
According to the respondents in the study, the ability to use automation to send highly relevant communication is crucial. 80% of companies said automation technology helps them to send better-quality communications, improving customer retention and acquisition.
9. A 5% increase in customer retention can lead to an increase of up to 95% in profits
(Bain & Company, and Harvard Business School)
A study conducted in 2000 into the “economics of loyalty” by Harvard Business School and Bain & Company highlighted the importance of not only acquiring but retaining customers. According to this report, improving customer retention by just 5% can lead to a significant increase in profit.
By increasing retention rates by 5%, the respondents in the report revealed they had increased their profit margins by between 25% and 95%. The report noted that the level of new profits a company could achieve from improving retention would often be determined by factors like the industry the business operated in, and the lifetime value of the customer.
10. Websites are the most common channels used for customer acquisition
Data shared by Invesp in a branded infographic showed 89% of companies rely most on their website for customer acquisition. The second most common channel leveraged for acquisition is email (81%), followed by social media sites (72%).
Interestingly, the infographic also shows 66% of companies are still using direct mail as a strategy for customer acquisition, whereas only 65% rely on SEO and PPC. Other potential channels for customer acquisition included:
- Website banners (60%)
- Mobile devices (34%)
- Aggregator websites (32%)
- Price comparison websites (18%)
11. Acquiring a new customer can cost up to 7 times more than selling to an existing customer
While previous statistics have indicated the cost of acquiring a customer can be up to 5 times higher than selling to an existing client, Neil Patel believes this number is increasing. Currently, Neil indicates that acquiring a new customer can cost up to 7 times more than simply focusing on converting existing clients.
Despite this, according to Patel, around 63% of marketers believe that acquiring new customers is still the most important goal of their advertising efforts.
12. US companies lose an average of $136.8 billion due to customer “switching”
The Call miner Churn Index report for 2018 indicates low loyalty among acquired customers can be a significant problem for business leaders. According to the report, US companies use around $136 billion per year due to customers switching to a new provider.
The survey also revealed around 85% of adults switched suppliers more than once within a year. Customer switching was most common among communication companies (71%), banks (32%), and property insurance suppliers (27%).
What’s more, CallMiner’s Index noted that the pace of customer switching is accelerating. The rate for 2018 was almost 2.5 times higher than for the year before.
13. Loyal customers are 5 times more likely to repurchase
According to Microsoft and a partnered customer experience agency, companies should be focused not just on acquiring new customers but building loyalty with their existing clients. Microsoft revealed loyal customers are around 5 times more likely to purchase from the same company again.
What’s more, loyal customers were also deemed 4 times more likely to refer a company to a friend, and 5 times more likely to forgive the business if something went wrong with their service. These loyal consumers are also 7 times more likely to try a new service or product offered by a brand.
14. 55% of customers have higher expectations for brands today
A Microsoft Report on the state of customer experience in the modern marketplace found 55% of consumers have higher expectations for customer service than a year ago. The report also outlines these expectations guide the decisions made by customers on which companies to buy from.
Some of the new expectations customers have of companies include wanting them to proactively reach out with customer service notifications. 67% of customers said they would be happy receiving proactive customer service notifications from companies.
Customers also say they expect the brands they do business with to be active and responsive on social media. 54% of respondents said they viewed brands more favorably if they responded to customer queries on social media.
15. The Customer Experience Management market is projected to be worth $27.12 billion by 2030.
To acquire and retain customers, businesses need to invest in the right tools for customer experience management. As of 2021, the Grandview Research report on Customer Experience Management found the market size for CX technologies and tools was worth around $8.79 billion.
According to the analysts, the growing importance of understanding customer behavior and preferences to increase customer acquisition and retention strategies is prompting companies to adopt CX solutions at an increased rate.
Between the years 2022 and 2030, the market is expected to grow at a CAGR of 18.1%, to a value of around 27.12 billion by 2028.
16. Paid search is more common in customer acquisition than retention
According to data from the Invespcro.com infographic, companies generally use several channels for both customer retention and acquisition. However, some channels are more common for acquisition, while others are more effective for retaining customers.
Paid search, for instance, is the primary channel of choice for customer acquisition (86%), but only 2% of companies said they used this avenue for customer retention. Similarly, online display advertising was popular among 85% of companies for customer acquisition, but only 4% of companies are using it for customer retention.
Other channels balanced out as follows:
- SEO: 66% use for customer acquisition, 6% use for customer retention
- Web retargeting: 61% for customer acquisition, 22% use for customer retention
- Mobile web: 52% use for customer acquisition, 18% for customer retention
- Social media marketing: 31% use for customer acquisition, 28% for customer retention
- Mobile apps: 30% use for customer acquisition, 44% use for customer retention
17. 89% of customers are more likely to make another purchase after a positive service experience
To hold onto a customer after the initial acquisition, or improve their chances of higher profits, companies need to deliver excellent customer experiences straight away.
The Salesforce “State of the Connected Customer” report looked at feedback from 15,000 consumers and business buyers and found 89% would be more likely to make a repeat purchase after a positive initial interaction.
In this study, 72% of respondents also said they have made purchase decisions directly based on the quality of the customer service they expect they’re going to receive.
Conclusion: Customer Acquisition Statistics
So there you have it! 17 customer acquisition statistics to get your mind turning, your wheels spinning, and your fingers dancing across that keyboard.
We hope this collection of customer acquisition stats has been helpful to you. We know that understanding the value of customer acquisition is key to building a thriving, sustainable business, and we hope these facts have helped paint a clearer picture of why it’s so important to nurture and attend to your customers.
If you found this blog post helpful, we’d love it if you shared it with a friend. If there’s anything else we can do for you, please don’t hesitate to hit reply and let us know. We’re a friendly bunch, we promise! We hope to hear from you soon 😁