Email and Referral Marketing: The Workhorse and Dark Horse for Customer Acquisition

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Digital long ago established itself as a channel for brand building and direct marketing. But what are the most popular digital tools for acquiring customers? According to my newly published report for Gigaom Research, the unsexy tactic of email marketing is a digital workhorse, popular for awareness building, and customer acquisition, conversion, and retention. And referral marketing, not used as widely as other tactics, provides an especially strong payoff for its practitioners. My report suggests to marketers that acquiring customers in the digital era is like creating a mosaic: to achieve a beautiful outcome, companies need to apply the right blend of tactics. For instance, brands should consider using social media and referral marketing to complement lists created for email campaigns.

The report, Workhorses and Dark Horses: Digital Tactics for Customer Acquisition, is based on a Gigaom survey of 300 U.S. digital marketers. We wanted to understand how they are using digital marketing tactics across the marketing funnel, spanning awareness, customer acquisition, conversion, and retention. Our survey affirms that digital marketing is being used consistently across the entire customer experience.

Marketers told us that social media, already well known as an awareness-building tool, is also particularly useful for customer retention. Content marketing is especially useful for awareness and retention. And email is consistently used across the entire marketing funnel.

Digital Marketing Spend Set to Increase

Here are the key findings of our survey:

  • Nearly 60 percent of companies plan to increase their digital marketing spend in 2014.
  • Email marketing is the digital workhorse, deemed the most effective (relative to other digital tactics) for building awareness, acquisition, retention, and conversion. In fact, 56 percent of respondents identified email as being the most effective at retention, several points ahead of the second-most-effective tactic.
  • Social spending is set to increase, but we discern some buying on faith with social. More marketers plan to spend more on social media marketing than any other digital tactic. But when we asked marketers to describe their perceptions of social media marketing, more marketers agreed with the statement “It is difficult to prove ROI for social media marketing” than with any other statement.
  • Referral marketing is a digital marketing dark horse. Only 39 percent of marketers use it regularly, but 43 percent of those who do use it acquire more than 35 percent of their new customers with it. These numbers are double the percentage of marketers who report such acquisition rates using email. Brands that invest in referral can gain a competitive advantage over those investing elsewhere.

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