New data from unified customer platform Klaviyo has revealed that UK SMBs will be focusing on acquisition, despite cuts to budgets. 67% of UK SMB’s main priority will be to acquire new customers in 2023*, despite the cost of acquiring being up to five times more expensive than retaining existing customers.
However, with almost 60% of respondents reporting their marketing budgets will remain static or be slashed or marketing budgets being cut or remaining static for 2023, there is a disconnect between the budgets and ambitious plans. Marketers should be focusing on nurturing existing relationships and building connections with their customers in more personalised and agile ways.
The study, conducted in December this year, surveyed over 1000 decision makers at small to medium sized businesses across the UK showed that only 10% of SMB’s budgets will be increased for 2023. The cost of living crisis and inflation rates have resulted in the majority of businesses having to be tactical in order to get the most out of their budgets going into the new year as revealed by Klaviyo’s research from earlier in the year, in which 36% of SMBs said that smarter marketing solutions would help fight the challenges of the cost of living crisis**.
When it comes to the priority areas, 32% of respondents said Facebook Marketing will be part of their marketing strategy. With the other social media platforms, only 6% will be prioritising Twitter, which isn’t surprising given the recent turbulence since Musk’s takeover. 5% will look to TikTok, suggesting younger demographics aren’t a priority audience and 15% will be focusing on LinkedIn implying a more corporate focus for 2023.
With SMB’s not focusing on customer retention and with only 1% prioritising SMS marketing, a trick is being missed here. Consumers are tightening their belts and being savvy with their spending. This is why it’s important that relationships between customers and brands are nurtured and one of the best ways to do this is through personalised marketing. Offering customers what they need/want by enticing them with personalised prompts and exclusive offers. 21% of SMB’s will be focusing on email marketing in 2023, but the point remains, being personalised in the approach is key to retention.
Klaviyo’s Senior Director of Marketing, Gemma Banks comments: “SMB leaders have to be smart about their spending. In times like these, it’s best to prioritise the channels that give a better return vs those that take years to see any form of payback. For example, it costs much more to acquire a new customer than it does to build loyalty with existing ones. Deploying personalised marketing strategies alongside specific customer acquisition targets will help to do more with less and navigate the choppy waters of the 2023 economy.”