The Price of Growth: Acquisition Alone Isn’t Enough
Acquiring new customers is one of the most expensive (and necessary) investments a financial institution can make. However, Customer Acquisition Costs (CAC) can consume a significant portion of the marketing and operational budget. With competition being so fierce and consumers expecting more than ever, traditional acquisition methods aren’t cutting it.
“Thankfully, once someone opens an account, they stick around, right?”
[BUZZER SOUND] Wrong. Opening an account doesn’t guarantee long-term success. In fact, many new accounts go inactive within months, leaving banks and credit unions with sunk costs and nothing to show for it.
The real challenge? It’s not just getting people in the door. It’s activating them early, engaging them consistently, and building relationships that actually last.
Read on to explore the growing pressure around CAC in the banking industry, what financial institutions are reporting, and how a smarter, more personalized approach to onboarding and engagement can dramatically reduce those costs while improving customer lifetime value.
Why Acquisition Is Getting More Expensive
Customer Acquisition Cost is the total investment required to gain a new customer, including marketing spend, sales resources, and operational support. It looks a little something like this:
While credit unions report an average Member Acquisition Cost (MAC) of approximately $428 per new member, traditional banks often face higher costs. Retail consumer banks average around $561 per customer, commercial banks reach $760, and investment banks top the scale at $882 per new client.
Despite the rising focus on acquisition efficiency, many institutions aren’t even tracking MAC. A February 2025 MAC Report revealed that over 40% of credit union executives don’t know their number. This lack of visibility creates a strategic blind spot. We often see institutions doubling down on ad spend without knowing where the value ends and where acquisition costs begin eating into real growth.
At a time when marketing budgets are tightening, this is a cost center no institution can afford to ignore.
How Much Are FIs Spending on CAC?
Customer acquisition doesn’t happen in a vacuum—it’s fueled by significant marketing spend. According to the February 2025 Member Acquisition Cost (MAC) Report, nearly 40% of credit unions reported spending $1 million to over $5 million annually on marketing. That’s a substantial investment by any standard—and one that underscores the need for strategic clarity around how that money is used.
Moreover, the report also found that nearly half of that marketing budget is spent on digital channels. From paid social media to search to programmatic display, digital media continues to dominate as the preferred method of reaching prospective members and customers.
Yet with so much riding on these budgets—and with CAC trending upward—it becomes even more critical for institutions to answer one question: Are we turning this spend into long-term value?
Without clear visibility into CAC and a strategy to reduce it, institutions risk investing millions in top-of-funnel efforts that fail to drive sustained engagement or retention.
Acquisition Costs Are Costing Your Institution
High CAC impacts marketing efficiency and the entire financial model. When acquisition costs spike without a corresponding increase in lifetime value, margins shrink, and pressure mounts across the board.
Institutions may feel the impact in several areas:
- Lower ROI on marketing spend
- Longer payback periods before a new customer becomes profitable
- More aggressive sales tactics that could lead to lower-quality acquisitions
- Reduced flexibility to invest in other strategic initiatives
CAC directly impacts your institution’s ability to grow efficiently. Smart organizations monitor it closely across departments, using it as a benchmark for product alignment, CX effectiveness, and revenue performance.
What FIs are Doing to Combat Rising CAC
In response to escalating CAC, financial institutions are adopting innovative strategies to enhance efficiency and reduce expenses:
- Focusing on Customer Engagement and Retention: Building strong relationships with existing customers through personalized communication and value-added services can increase loyalty and reduce the need for expensive acquisition campaigns.
- Leveraging Data Analytics for Targeted Marketing: By analyzing customer data, FIs can more effectively identify and target high-potential prospects, optimize marketing spend, and improve conversion rates.
- Improving Digital Onboarding Processes: Streamlining digital onboarding can reduce drop-off rates and enhance the customer experience, leading to higher retention and lower acquisition costs.
While these strategies can help reduce CAC in the short term, long-term efficiency requires a deeper look at how success is being measured. Financial institutions need to go beyond surface-level metrics to optimize acquisition efforts and consider the quality of the relationships they’re building.
The Importance of Measuring Relationship Depth
While many institutions measure acquisition costs on a per-account basis, this approach often overlooks the value of relationship depth and engagement. A survey highlighted that 46% of respondents assessed acquisition costs solely by accounts opened, without considering the extent of customer engagement or the breadth of the relationship. This narrow focus can lead to misinformed strategies that prioritize quantity over quality.
By incorporating metrics that assess relationship depth, such as mobile app logins, recurring direct deposits, debit card usage, number of active products, and cross-channel interactions, financial institutions gain a more accurate understanding of acquisition efficiency and long-term member value.
Measuring acquisition purely by accounts opened misses a critical truth: depth matters. Improving primacy and retention is one of the most reliable ways to deepen those relationships (and maximize your CAC).
Why Primacy Should Be Part of the CAC Conversation
Not all customers are created equal, especially when it comes to long-term value. A checking account that becomes the customer’s primary financial hub (i.e., receives their direct deposit and supports everyday transactions) delivers more value than one that sits dormant.
That’s why measuring CAC solely on the number of accounts opened misses a crucial piece of the puzzle. It doesn’t reflect relationship quality, depth, or revenue potential.
By aligning CAC strategies with primacy metrics (such as product usage, digital engagement, and deposit activity), banks and credit unions can focus on acquiring customers who are more likely to become profitable, long-term relationships.
Retention Tactics That Protect Your Acquisition Investment
Even when a new customer is acquired, the financial payoff isn’t guaranteed.
Data shows that 34% of newly opened checking accounts become inactive within the first year. When a customer churns shortly after onboarding, the CAC associated with that acquisition becomes a sunk cost, with little to no lifetime value in return.
Many institutions invest heavily in acquisition (upwards of $700 per customer!) but overlook the critical opportunity to engage, educate, and retain customers after the account is opened.
Every customer who walks away early is more than a lost sale; it’s a lost relationship. And for banks and credit unions, relationships are everything.
Improving post-acquisition engagement reduces early-stage attrition, increases cross-sell and product adoption opportunities, and turns costly one-time conversions into long-term revenue streams. In short, your CAC only pays off when your customer stays.
Key Retention Levers That Influence CAC:
- Faster onboarding processes that reduce friction
- Personalized communications that reflect actual customer behavior
- Timely engagement during the first 30, 60, and 90 days post-signup
- Data-backed insights to segment and message users more effectively
Institutions that invest in these retention levers are more likely to see CAC become an efficient growth engine, rather than a drag on profitability.
Solving the CAC Challenge
Once you’ve recognized the need to improve CAC and understand retention’s role in driving long-term efficiency, your next step is execution. That’s where platforms like Swaystack come in.
Swaystack is a personalized engagement platform built specifically for banks and credit unions. It helps financial institutions reduce CAC by ensuring each new customer is onboarded, activated, and retained with intent.
Here’s how Swaystack supports CAC optimization:
- Gamified onboarding: Encourages early actions like direct deposit setup, subscription transfers, and account funding to build momentum with new users.
- Behavioral segmentation: Leverages transactional, account, and behavioral data to create personalized audiences for better targeting.
- Omnichannel campaigns: Coordinate touch points across email, SMS, widgets, and push notifications so customers get the right message at the right moment.
- Insight-driven analytics: Surfaces which campaigns and segments are most effective in reducing early-stage churn and driving ongoing engagement.
- Faster time-to-value: Helps institutions demonstrate progress to new members quickly, increasing the likelihood of long-term retention.
What to Do Next
If you’re unsure of your institution’s true CAC (or how it correlates to customer engagement and long-term profitability), now is the time to investigate.
Start by assessing how your teams currently define and track CAC. Are you measuring it purely by accounts opened? Are you factoring in primacy, activation milestones, or product adoption? What’s your average payback period for a new customer?
From there, take an honest look at your onboarding and retention strategy. Does it include structured engagement in the first 30, 60, and 90 days? Are you using customer behavior and transaction data to tailor communications? Can you pinpoint if and where drop-off occurs and adjust accordingly?
Reducing CAC means rethinking your approach from chasing growth at any cost to acquiring customers with long-term value in mind.
Rethinking Growth for the Long-Haul
Reducing CAC is about spending your money in the most strategic way possible and building the kinds of customer relationships that lead to meaningful, measurable value.
The institutions that succeed in this new era won’t be the ones that cast the widest net. They’ll be the ones that:
- Understand their ideal customer profile
- Personalize onboarding experiences to reduce friction and churn
- Prioritize relationship depth, not just new account open volume
- Track CAC with the help of multiple teams and tie it to long-term engagement
By connecting your acquisition efforts to long-term engagement, your institution can ensure that every new customer relationship delivers lasting value.
With the right data, processes, and platforms (like Swaystack😉), your institution can improve CAC while delivering more value to the people who matter most: your customers.
Contact us for a quick demo.