Marketing

Brands lose $29 on every new customer acquisition, claims research

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August 9, 2022

When it comes to customer acquisition the price is getting higher, according to research from SimplicityDX.

Retailers are losing $29 on average for every new customer acquired — a 222% jump in the last eight years, according to a press release.

"Customer acquisition cost is a massive challenge for brands and retailers. Some brands now find it cheaper to acquire new customers by delivering personalized paper catalogs to their homes rather than acquire them via digital advertising. This would have been unthinkable just a few years ago when marketing through digital channels was a bargain," Jordan Jewell, former research director at IDC and now analyst in residence for VTEX, said in the release.

Key factors include increased consumer privacy legislation, the demise of third-party cookies and the introduction of iOS 14.5, according to the release.

"Social checkout looks like a tantalizing way to inject shoppable content into customers' social feeds. But this is 'fool's gold' because it makes no sense in the current environment to pay to advertise to acquire customers for whom you lose $29 on every sale and then can't market to," Charles Nicholls, founding director and chief strategy officer for SimplicityDX, said in the release.