RISING ACQUISITION COSTS: HOW STRATEGIC BRANDS ARE RESPONDING

The health and wellness industry continues its remarkable growth trajectory, projected to reach $11 trillion globally by 2034. Yet alongside this expansion comes a significant challenge: dramatically rising customer acquisition costs that threaten profitability and sustainable growth.

Our proprietary research for the "State of Health & Wellness Marketing 2025" report reveals that health and wellness brands face increasing pressure as digital marketing costs surge and consumer attention fragments. How are leading brands responding to this challenge? The answer lies not in incremental tactics, but in strategic brand development and focused marketing approaches.

THE RISING COST CRISIS

The numbers tell a compelling story. Our research indicates that health and wellness brands have experienced:

• 38-65% increases in paid search costs for key industry terms over the past two years

• 42-57% higher social media advertising costs to reach targeted wellness audiences

• 31-48% increases in influencer marketing rates for health and wellness partnerships

These rising costs create a critical challenge when combined with the industry's typically extended customer journeys and complex attribution models. With longer paths to purchase and multiple touchpoints influencing decisions, connecting marketing spend to business outcomes becomes increasingly difficult.

WHY TRADITIONAL APPROACHES FALL SHORT

Many brands respond to rising acquisition costs with tactical adjustments:

• Increasing marketing budgets to maintain visibility

• Chasing newer, less expensive platforms before they mature

• Expanding target audiences to reach lower-cost segments

• Emphasizing short-term conversions over brand building

While these approaches may provide temporary relief, our research shows they often lead to diminishing returns, brand dilution, and customer relationships built on transactional foundations rather than lasting value.

THE STRATEGIC BRAND ADVANTAGE

In contrast, health and wellness brands with strong strategic foundations are navigating these challenges differently—and more successfully. Our research reveals that brands with well-developed strategic positioning outperform competitors across key metrics:

• 43% higher customer retention rates

• 28% increased average transaction value

• 37% greater customer advocacy and referrals

These advantages directly counter rising acquisition costs by enhancing the lifetime value of each customer relationship. When acquisition requires greater investment, maximizing customer retention and value becomes even more critical.

HOW STRATEGIC BRANDS ARE RESPONDING

Our research identified specific approaches that strategic health and wellness brands are implementing to overcome rising acquisition costs:

1. Deeper Customer Understanding

Strategic brands invest in comprehensive audience research to understand:

• Specific pain points and aspirations that drive purchasing decisions

• Distinct segments within their broader target market

• Customer lifetime value potential by segment

• Most influential touchpoints in the decision journey

This deeper understanding allows for more targeted, efficient marketing that connects meaningfully with high-value prospects.

2. Distinctive Brand Positioning

Rather than competing on increasingly expensive generic terms and messaging, strategic brands develop:

• Clearly articulated value propositions that address specific customer needs

• Distinctive brand voices that cut through industry sameness

• Ownable visual and verbal identities that enhance recognition

• Consistent messaging hierarchies across all touchpoints

This distinctive positioning reduces reliance on paid visibility while increasing organic recognition and consideration.

3. Strategic Channel Selection

Instead of attempting omnipresence, strategic brands:

• Identify channels with the highest alignment to their audience and message

• Develop channel-specific strategies rather than repurposed content

• Build deeper engagement in fewer channels rather than surface presence across many

• Connect channel strategies to specific stages in the customer journey

This focused approach maximizes impact while optimizing resource allocation.

4. Value-Driven Content Development

Strategic brands emphasize content that:

• Addresses specific customer challenges with genuine solutions

• Demonstrates distinctive expertise and perspective

• Builds cumulative value through interconnected resources

• Positions the brand as a trusted advisor rather than a vendor

This value-first approach attracts qualified prospects while filtering out poor fits, enhancing conversion efficiency.

5. Measurement Beyond Acquisition

While monitoring acquisition metrics, strategic brands also emphasize:

• Customer lifetime value by acquisition source

• Retention and expansion rates by segment

• Referral and advocacy measurements

• Brand equity indicators including preference and trust

This expanded measurement framework ensures marketing investments build long-term value, not just short-term transactions.

CASE STUDY: STRATEGIC RESPONSE TO RISING COSTS

A revealing example comes from an integrative wellness center facing dramatically rising acquisition costs for their core services. Rather than simply increasing their marketing budget, they implemented a strategic response:

1. Conducted comprehensive audience research to identify their most valuable customer segments and their specific needs

2. Developed distinctive positioning around "whole-person transformation" with clear differentiation from competitors

3. Created service architecture with transparent connections between offerings to enhance cross-utilization

4. Implemented a lean marketing approach focused on specific customer journeys and value demonstration

The results were compelling:

• 42% increase in qualified leads within 6 months

• 28% reduction in cost per acquisition

• 35% improvement in cross-service utilization

• 22% increase in average client lifetime value

THE PATH FORWARD: FROM TACTICAL TO STRATEGIC

Rising acquisition costs represent a fundamental industry shift rather than a temporary challenge. Health and wellness brands that respond with strategic brand development and focused marketing approaches will not only weather this change but thrive through it.

Key questions to consider for your health and wellness brand include:

1. Does your brand have genuinely distinctive positioning that reduces reliance on paid visibility?

2. Are your marketing efforts building cumulative value or requiring constant reinvestment?

3. Have you identified your most valuable customer segments and aligned your acquisition strategy accordingly?

4. Does your measurement framework capture the full impact of your marketing beyond initial acquisition?

GAINING STRATEGIC ADVANTAGE

In an environment of rising acquisition costs, strategic brand development is no longer optional—it's essential for sustainable growth and profitability in the health and wellness industry.

Want to explore how strategic brand development and lean marketing approaches can help your health and wellness business thrive despite rising acquisition costs?

Our comprehensive "State of Health & Wellness Marketing 2025" report provides data-driven insights and actionable strategies to navigate this challenging landscape. Download the complete research to gain clarity on your optimal path forward.

Kōvly Studio is a full-service brand and marketing agency for experience-driven brands. We support health + wellness brands in connecting with their most profitable target market. Our distinct approach and expertise enable us to transform businesses, allowing our clients to pursue their business goals with confidence.