UK Marketers Slant Budgets Toward CRM

10 November 2005

More than half of budgeted marketing expenditure among the UK's top one thousand companies is now directed at existing customers, claims a new report.

In a survey conducted by global mail management specialist Pitney-Bowes, it emerges that 53% of marketing budgets within major British companies is directed at customer retention - an increase of 9.5% since the last survey in 2003.

Key points from the survey are:

  • The retail and hotel industries lead the way, allocating about 57% of their spend to existing customers.

  • Charities still spend less than half their budgets on attempting to minimise churn rates, but the figure has risen to 47% from 39% in 2003.

  • Increases in other sectors have been consistent across the board, with two exceptions: mail order and travel. In 2003 the former spent 56% of its marketing budgets on customer retention - the highest proportion across all industries. This has now fallen to 42%. Travel too has fallen, from 52% to 47%.
Commenting on the general upward trend, consultant Clive Mollett believes focus on retention reflects the need to be more measurably effective. "Retaining customers has always been more effective and companies are now better at measuring the results of what they are doing."

Mollett also believes that Britain's 200,000-plus charities are suffering from a "declining propensity to give" - an environment in which existing donors are more valuable to charities than ever before.

Data sourced from BrandRepublic (UK); additional content by WARC staff