By Novuna
Acquiring new customers is a crucial part of any retail business strategy. Our latest study with retailers, conducted as part of Novuna Consumer Finance’s market analysis, reveals that acquiring new customers is becoming increasingly costly. 69% of retailers reported rising customer acquisition costs (CAC), while a quarter admitted they don’t fully understand their true CAC. These findings highlight the growing challenge of attracting new customers and the urgent need for cost-effective acquisition strategies.
So, how can retailers attract new customers without overspending? Here are some proven strategies to reduce acquisition costs while maximising customer value.
Offer flexible finance options
One of the most effective ways to attract new customers is by offering accessible and flexible finance options. According to the Novuna report, customers increasingly prefer to spread the cost of big-ticket purchases over manageable monthly payments. Through optimising finance and being transparent with finance options available, retailers can make their products more appealing without resorting to heavy discounts
Focus on owned marketing channels
With 46% of retailers citing increased marketing costs as a top challenge, investing in owned marketing channels can be a smart move. Organic SEO, social media, email marketing, and content marketing allow businesses to drive traffic and engagement without the ongoing cost of paid advertising. Effective SEO strategies and high-quality content can attract potential customers searching for relevant information or products.
Personalisation drives conversions
Personalisation isn’t just a buzzword – it’s a powerful tool for attracting new customers. The Novuna whitepaper highlights that companies excelling in personalised marketing generate 40% more revenue than those who don’t. Leveraging customer data to provide targeted recommendations, personalised emails, and tailored promotions can significantly boost conversion rates. However, personalisation shouldn’t stop at marketing – it can be embedded throughout the entire customer journey. There’s little value in offering the perfect product based on insightful data, only for the customer to face a rigid, impersonal finance rejection. Every interaction should reinforce that their needs are at the heart of your business.
Make the most of social proof
Trust is a critical factor in customer acquisition. Customer reviews, testimonials, and user-generated content serve as powerful social proof, making your brand more trustworthy to potential customers. Encouraging satisfied customers to share their experiences can significantly boost credibility and drive new business.
Optimise for omnichannel retailing
An omnichannel strategy is no longer optional. Customers expect a seamless experience whether they shop online, in-store, or through mobile apps. The Novuna report notes that omnichannel customers tend to spend more than single-channel shoppers, making this a cost-effective strategy for boosting acquisition.
Implement referral programmes
Word-of-mouth is still one of the most powerful marketing tools available. Referral programmes incentivise existing customers to introduce new shoppers to your brand, often at a fraction of the cost of traditional advertising. By offering rewards like discounts or exclusive access, retailers can expand their customer base organically.
Focus on warm leads
Retargeting allows you to focus your marketing budget on people who have already shown interest in your brand. Ads targeted at users who have visited your website or engaged with your content are far more likely to convert than cold audiences. Retargeting campaigns can be a cost-effective way to re-engage potential customers and drive them back to complete a purchase.
Prevent abandoned carts
Shopping cart abandonment is a significant issue for online retailers, with potential sales often slipping away at the last minute. By implementing strategies such as personalised follow-up emails, free delivery offers, and displaying finance options upfront and at every touchpoint along the customer’s buying journey, businesses can recapture these lost opportunities.
Test, learn, and adapt
With acquisition costs rising, testing and optimisation have never been more important. A/B testing of marketing messages, landing pages, and ad creatives can help identify the most cost-effective strategies. By constantly measuring and adjusting tactics, retailers can ensure that their marketing budgets deliver maximum return on investment.
Key takeaways:
- Customer acquisition costs are rising: 69% of retailers report increasing costs; 25% are unclear about their actual cost.
- Offer flexible finance options: Helps customers spread the cost, making big purchases more affordable without heavy discounts.
- Invest in owned marketing channels: Organic SEO, social media, email marketing, and content marketing reduce reliance on costly paid advertising.
- Prioritise personalisation: Personalised recommendations, promotions, and finance options significantly boost conversions and revenue.
- Utilise social proof: Reviews and testimonials build trust and credibility, encouraging new customer engagement.
- Optimise for omnichannel retailing: Providing seamless experiences across all channels increases customer spending.
- Prevent abandoned carts: Use personalised follow-ups, finance options, and clear incentives (e.g., free delivery) to reduce lost sales.
- Test, learn, and adapt continuously: Regularly evaluate and optimise marketing strategies to ensure maximum ROI.
In an increasingly competitive retail landscape, reducing customer acquisition costs requires a strategic approach. By focusing on cost-effective channels, personalising customer experiences, and leveraging affordable finance options, retailers can attract new customers without significantly increasing their budget.
If you’d like more information on how the implementation of an effective retail finance solution can help you win more customers, get those customers spending more and boost your bottom-line, visit NovunaConsumerFinance.co.uk.
Published 10/04/25
