PODCAST: Understanding the true cost of customer acquisition
Written by
Friday 6th June 2025
In the latest episode of Retail Gazette's Retail Unpacked podcast, Phil Alltoft, Commercial Lead at Novuna Consumer Finance, explores one of the biggest challenges facing retailers today: the rising cost of customer acquisition (CAC).
With a quarter of retailers unaware of their CAC and over a third not tracking customer retention, many are operating without a clear picture of their customer base.
The rising tide of acquisition costs
Phil points out that 69% of retailers are experiencing increasing acquisition costs, driven by factors such as growing digital advertising spend and changes to data privacy laws.
This makes it all the more important for retailers to find a balance between attracting new customers and retaining existing ones.
Using finance options to mitigate costs
One of the key strategies discussed is the use of point-of-sale finance solutions. By offering flexible finance options, retailers can boost customers’ purchasing power, which may lead to higher conversion rates and increased average order values.
This not only helps to offset rising CAC, but also supports customer loyalty.
The value of personalisation
Personalisation is also highlighted as an essential driver of customer loyalty. Tailoring the shopping experience and offers to individual preferences can significantly improve retention.
In turn, this allows retailers to maximise the return on their acquisition investment.
Strategies for sustainable growth in 2025
Looking ahead, Phil outlines a number of practical steps retailers can take to support sustainable growth:
- Track and understand CAC: Regularly review customer acquisition costs to ensure marketing investment is delivering strong returns.
- Prioritise retention: Focus on keeping existing customers through loyalty initiatives and a personalised approach.
- Offer finance solutions: Provide flexible finance options to improve affordability and customer satisfaction.
Written by
Stephanie Reid, our Marketing Manager, has been helping retailers utilise their payment options for nearly a decade. She often shares her unique insights on how to promote finance effectively, ensuring it's front of mind when customers are making a purchasing decision.
