Here’s How Marketers Are Responding to the Customer Acquisition Challenge

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Published on
Jun 9, 2022
Written by
Kayla Ellman
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New research from CommerceNext reveals how marketers are rethinking their tried-and-true strategies for acquisition, retention, and capturing customer data.

Consumers today have seemingly infinite shopping choices. Not only do they have more options when it comes to how they shop—online, in-store, or a mix of both—but they also have more brands and retailers to choose from than ever before. 

At the same time, the data privacy landscape as marketers know it is changing. They're preparing for a future without third-party cookies, but customer acquisition costs (CACs), which have been consistently going up, have already proven to be a point of concern. According to CommerceNext's fourth annual benchmarking report, 61% of retailers see rising CACs as one of their biggest challenges this year.

Without being able to rely as heavily on trusted advertising platforms like Meta and Google, brands and marketers are responding by branching out. They're diversifying their tactics for acquisition and retention, and exploring new avenues for data collection and personalization.

Here's a closer look at the strategies they’re using and the channels they’re prioritizing.

Out with the old, in with the new (acquisition channels)

Marketers are ready to modernize their customer acquisition strategies and try new things beyond Meta-owned channels and Google. TikTok is at the top of the list, with 69% of retailers expecting to invest more in the short-form video platform this year, followed closely by influencer marketing (57%).

The influence of social media

Leaning into social commerce to acquire new shoppers isn't a surprising move given how many consumers make purchases from social media (nearly half of all US adults in 2021). Not to mention the power of a TikTok video to completely wipe a trending product off the shelves (#TikTokMadeMeBuyIt). 

The case for investing in a channel like TikTok is clear because the influence is undeniable. It’s the most downloaded app, but it’s also a place people go to discover new brands and products. 43% of users try something or go somewhere new after seeing it at least once on the platform. 

Merging traditional and digital marketing strategies 

Marketers are looking to add some traditional advertising channels to the mix as well, nodding back to the days of television, print, and radio. Specifically, 42% of retailers are planning to invest more in Connected TV (CTV) and streaming this year, followed by direct mail (38%), and podcasts (25%). 

By tapping into streaming services, brands can reach even more potential customers. Over 80% of TV households in the US now have at least one CTV device (like Xbox, Roku, or Amazon Fire TV). If you think about recent ads that have gone viral, there’s also often a mobile component—like a QR code—that makes it easy for a viewer to immediately learn more or shop directly from the ad. Not only that, but some ads are so good, they inspire consumers to pause what they're watching and shop for the product online. 

Marketers can do something similar with direct mail, adding QR codes that consumers can scan to visit a website, get a discount code, or take another action on their phones. Either way, direct mail still works: 41% of consumers say receiving an ad in the mail encourages them to go online to make a purchase from that advertiser. 

With podcast advertising, we can see elements of influencer marketing. If you’re listening to your favorite podcast and hear an ad, you’re more likely to at least consider trying the product, especially if you trust the host. And as consumers are increasing the amount of time they spend listening to podcasts, marketers have an opportunity to create and deliver ear-catching ads.   

Bottom line: retailers are ready and willing to show up anywhere and everywhere people are consuming content to convert them into customers. 

Putting brand first to deepen loyalty and retention efforts

As acquisition is getting harder, retention is taking a front seat alongside it, with brand marketing leading the way. Many retailers are engaging their existing communities to increase customer lifetime value, focusing on organic social (88%) and SMS marketing (69%)

Ultimately, it’s about finding creative ways to get people invested in your brand, so they want to interact with your content and stay engaged long-term and across channels. 

To encourage their SMS subscribers to follow them on other channels, superfood health and beauty brand Golde created a two-way text messaging campaign highlighting the exclusive recipes they post on TikTok. The brand asked subscribers to reply with the keyword describing their “breakfast vibe” and then directed them to a corresponding TikTok recipe for oats, chia pudding, or french toast. 

Golde SMS marketing example for tiktok content

A strategy like this accomplishes a few things at once for a brand. It grows an organic social channel by turning SMS subscribers—who already trust your brand enough to share their phone number with you—into loyal TikTok followers. It keeps your SMS subscribers engaged with fun educational content that helps your brand stay top of mind between texts. 

It also helps create a cohesive brand experience for your consumers, so they feel like they're a part of your community, no matter which channel they're using to interact with you. 

The holidays are a brand marketing opportunity, too  

Compared to last year, when acquisition was higher than retention on the list of holiday priorities, retailers are planning to invest almost equally in both in 2022. So it's not just about getting people to buy and driving revenue during the holiday shopping season—it's about keeping those people around after the big spending period is over. 

Community will play a role in these post-holiday retention efforts. More retailers are planning to make brand marketing and cause marketing initiatives (like charitable partnerships) a part of their strategy this year. 

This will pay off in the long run: purpose-driven brands are rising in popularity, and in our own consumer survey, 44% of consumers said supporting a brand’s mission and values is one of the main reasons they keep subscribing and engaging with the brand.

Marketers are owning their data collection strategies

Despite being more aware of their privacy and how their information is being used, consumers expect brands to demonstrate that they know them on a personal level. It's a tricky position for brands to be in, but using owned channels to collect both first- and zero-party data has proven to be the path forward. 

For many retailers, that channel is SMS: 81% either already use it to gather first-party data, or are planning to launch it in 2022. But brands are also starting to take a more direct approach, explicitly asking customers to share their preferences through things like quizzes and surveys. 

Car seat and stroller brand Evenflo, for example, is capturing zero-party data with a product recommendation quiz on their website, which they partnered with Jebbit to create. The results speak for themselves: most shoppers finish the quiz once they start it, and those who take it have a higher overall conversion rate. But the biggest win for the brand are the insights shoppers willingly share by responding to each question, like the product they're looking for and the features that are most important to them.  

Marketers can also collect this kind of rich data from SMS with two-way text messaging conversations, which is what makes it such a valuable retention channel. SMS allows brands to capture the information they need to create the kind of personalized experiences that keep consumers coming back for more. And it's clearly working: 58% of retailers have seen a measurable impact from SMS on customer re-engagement and retention. 

Want more insights from CommerceNext’s fourth annual benchmarking report, The Ascension of Digital Maturity? Download it here.

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