It might be time to rethink budget allocations that lean heavily toward new customer acquisition

Many companies' marketing budgets are still heavily skewed toward new customer acquisition. It is common to see a structure where the majority of advertising spend is poured into new traffic, while only the remaining budget is allocated to measures for improving the LTV (Lifetime Value) of existing customers. Even in meetings, the focus is often solely on 'how to lower this month's CPA,' while 'how to nurture acquired customers' tends to be put on the back burner.

When you think about it calmly, the cost of acquiring new customers continues to rise year after year. Due to the impact of cookie regulations, targeting accuracy has also declined, and CPA is only skyrocketing. Continuing to allocate budgets with a bias toward new acquisition in this situation feels like pouring water into a bucket with a hole in it. If customers leave as soon as they are acquired, no matter how much you strengthen your advertising, the number of customers you retain will not increase.

What I realize in my conversations with clients is that companies that have restructured their budget allocations around LTV are less likely to be swayed by the soaring costs of advertising. It is becoming necessary to incorporate the idea of 'how much the acquired customer will contribute to sales thereafter' into the design from the very beginning, rather than just focusing on the target CPA for new acquisition.

Specifically, this means securing a certain budget for post-acquisition communication design (email, LINE, apps, etc.) in advance and evaluating it in tandem with the new acquisition budget. A surprising number of companies put this off. In fact, there are cases where LTV has grown to 140% starting from a LINE official account, and cases where customer sales contribution has increased by 1.6 times; Karitoru Chat is one of the services that has achieved results in this context.

The topic of budget allocation may seem mundane, but it is actually a management decision in itself. I believe it is time to rethink not just the binary choice of new acquisition versus LTV, but how to design both to work in tandem.

About DOTZ Inc.: https://dotz.co.jp/?utm_source=note&utm_medium=referral&utm_campaign=t35&utm_content=note_20260716