Here is a question worth thinking about: how much of your marketing budget goes toward winning new customers versus keeping the ones you already have?

If the answer is "almost all of it goes to new customers," you are not alone. But you might be leaving serious money on the table.

New data from Gartner's 2026 CMO Spend Survey just confirmed what many of us have suspected. Businesses are pouring more money than ever into finding new customers while spending less and less on keeping existing ones happy. And the numbers are striking.

What the Data Shows

According to Gartner, 62.6% of media budgets now go toward acquisition and awareness campaigns. That is up 10% from 2024. At the same time, spending on customer loyalty and retention has dropped by 29%, falling to under 15% of total marketing spend.

In simple terms: for every dollar most businesses spend on marketing, roughly 63 cents chases strangers while less than 15 cents nurtures the people who already trust you enough to buy.

Why This Is a Problem

Acquisition Costs Keep Rising

Every business owner running digital ads has noticed the same thing: it costs more to get a new customer this year than it did last year. Ad costs on Google and Meta have climbed steadily. Competition for attention keeps increasing. The cost of winning a brand-new customer has roughly doubled over the past five years for most industries.

Existing Customers Are Worth More Than You Think

Study after study shows the same pattern. Existing customers spend more per transaction. They buy more often. They refer friends. And they cost far less to sell to. The old rule of thumb still holds: it costs 5 to 7 times more to acquire a new customer than to keep an existing one.

For a local service business - a plumber, roofer, dentist, or HVAC company - your past customers are your most valuable asset. They already know your work. They already trust you. One email, one text, or one follow-up call can generate a repeat job without spending a single dollar on ads.

The AI Spending Gap

The Gartner survey also found that 70% of CMOs cannot scale their AI efforts properly, and only 30% have the infrastructure to use AI effectively. Many businesses are spending on AI-powered acquisition tools without having the basics of customer retention in place.

What Smart Businesses Do Differently

The businesses getting the best return on their marketing dollars are not just running more ads. They are building systems that turn one-time customers into repeat buyers automatically. Here is what that looks like:

1. Follow Up After Every Job

This sounds simple because it is. After you finish a job, send a thank-you message. Ask for a review. Offer a discount on their next service. Most businesses never do this, which means the ones that do stand out immediately.

A good CRM system automates this entirely. The follow-up goes out without anyone on your team lifting a finger.

2. Stay in Touch Between Purchases

An email once a month with seasonal tips, maintenance reminders, or helpful advice keeps your business top of mind. When that customer's AC breaks down in July, you want to be the first name they think of - not the first result they find on Google.

3. Ask for Referrals (the Right Way)

Your best customers already talk about you to their neighbors and friends. Make it easy for them. A simple referral program - "send a friend our way and you both get $25 off" - turns your happiest customers into your best marketing channel.

4. Rebalance Your Budget

You do not need to stop running ads. Acquisition still matters. But look at your numbers. If you are spending 80% or more of your budget on new customer campaigns and 0% on retention, even a small shift - moving 15-20% toward retention - can dramatically improve your return on every marketing dollar.

How This Applies to Local Service Businesses

If you run a local service business, this data hits especially close to home. Your service area is limited. There are only so many potential new customers within a 30-mile radius. At some point, the math on pure acquisition stops working.

But a customer who hired you once and had a great experience? That person needs your service again. Their water heater will eventually need replacing. Their roof will need maintenance. Their teeth still need cleanings. And when that time comes, the business that stayed in touch wins the job.

The most successful local businesses we work with at SpeedMobi treat their customer list like gold. They run ads to fill the pipeline, absolutely. But they also have automated follow-ups, review requests, seasonal campaigns, and referral programs running in the background at all times.

The Bottom Line

The Gartner data is a wake-up call. Most businesses are over-investing in the expensive part of marketing (finding strangers) and under-investing in the easy part (keeping friends). You do not need to choose one or the other. You need both. But the balance matters.

Start with what you have. Your existing customers already trust you. Build a system that keeps that relationship alive, and you will get more out of every marketing dollar you spend - whether it goes to ads, SEO , or good old-fashioned word of mouth.