New vs. Loyal: Why Lifetime Value Should Matter to Marketers

retargeting campaign

As marketers, we always want to expand the reach of our brand and attract new customers. But when we do, it’s easy to overlook loyal customers. So, why do we put so much emphasis on new customers, and why do current marketing practices favor gaining new customers over rewarding loyal ones? The main reason is boiled down to this: It’s easier for marketers to focus on new customer acquisition versus driving continued value from existing and/or past customers— in other words, customers with Lifetime Value (LTV).

Why Focus on Existing Customers?

The rule of thumb is that the cost to retain and upsell a customer is much lower than having to acquire new ones. According to the Harvard Business Review, it’s 5 to 25 times more expensive to get a new customer over retaining a current one. Further, if you increase retention rates by 5%, you can increase profits by 25% to 95%.

Despite these statistics, the majority of marketers have their strategies and efforts heavily focused on new customer acquisition.

What’s the Issue?

The main obstacle is this: It is difficult and takes extra effort to integrate business data with marketing data. In today’s world of business intelligence and artificial intelligence, it’s surprising that most companies still only focus on customer acquisition and don’t take advantage of developing intelligence around analyzing their current or past customer data. Marketers could leverage this data in myriad ways— from establishing a framework for creating customer profiles to aggregating customers into groups based on demographics like value, loyalty and lifetime worth.

Besides lack of mutual strategy planning, which is required for successful integration, marketing and business data systems are largely not connected. Even a delayed mechanism of exporting data and overlaying it with marketing would significantly improve coordination and results. Ultimately, business and marketing data are not working together, despite the fact that they are completely dependent on each other. Silos are entrenched in our corporations, preventing what could be mutually beneficial relationships.


Marketers need to shift their focus more towards lifetime value (LTV) marketing versus acquisition marketing. The pendulum is too skewed towards acquisition, leaving potential low-hanging prospects for immediate business impact on the table.

New systems are now allowing for connected data analytics and for leveraging user data and profiles for marketing. Opportunities like ad targeting can take campaigns to the next level and provide vast chances for increasing sales via LTV marketing practices. Marketers shouldn’t be afraid of testing these new forms of reaching their current or past customers, and they need to bridge the gap between user data and marketing.