How to use customer acquisition and retention goals in Google Ads

Google has introduced new capabilities within its new customer acquisition goals, including high-value customer bidding and retention targeting.

Most Google Ads strategies still treat new customers as inherently more valuable. That assumption breaks down quickly.

Not every new customer is worth acquiring, and not every existing customer is worth ignoring. Just because someone buys once doesn’t make them a customer for life. Likewise, some past buyers are far more likely to convert again than a net-new user.

This is where Google’s high-value customer and retention bidding goals start to matter.

How high-value customer bidding works in Google Ads

Google uses predictive bidding to help determine who your high-value customers are. However, the primary signal is the customer match list you upload within your account. 

To make these adjustments, go to the customer lifecycle optimization section under Goals > Summary, then select Edit goal.

Here, you’ll set a higher new customer value to bid more aggressively for high-value customers. Google will typically pre-populate a suggested value based on a higher LTV than your typical new customers. Review this carefully and decide how much higher you want to bid for a high-value new customer.

Once you do this, Google reports that added amount as in-platform conversion value, on top of the actual value from the sale or lead. If you use a cost-per-conversion model, this discrepancy may not matter as much. However, for ROAS-based bidding, the additional value can artificially inflate your campaign’s ROAS.

Google recently introduced a new column, original conversion value (found under the conversions columns section), to help separate the actual value from the additional value used to prioritize bidding. However, if you typically rely on conversion value/cost, that figure will still include the added value in its reporting.

Dig deeper: Google Ads quietly rolls out a new conversion metric

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Building and activating high-value customer audiences

To help Google identify high-value customers, you’ll need to add an audience list of high-value customers. 

Consider what qualifies a high-value customer to you when creating this list. Did they have a particularly high average order value, or were they a lead for a higher-tier service you offer? Compile this list and upload it. 

You’ll need at least 1,000 active members in the YouTube or Search network for it to be eligible to serve, and we typically see match rates between 29%-62% — meaning you’ll likely need well over 1,000 for the list to become eligible. 

The more data you include for each record in your first-party data, the higher your match rate will typically be. An email address is the baseline, but adding email, phone, and address increases your chances of matching to a signed-in user.

If you’d prefer a less manual approach, you can create and define audiences in Klaviyo and integrate them directly into your Google Ads account. Lists created from Klaviyo typically have high match rates.

Once these settings are in place within the customer lifecycle optimization section, the next step is to optimize your campaigns. You can’t apply both bidding goals to the same campaign, and you wouldn’t want the same targeting or ad copy for these different customer types.

Adjusting your bidding for high-value new customers is only available in Search and Performance Max campaigns and follows a similar setup. In campaign settings, expand the Customer acquisition section and select Adjust your bidding to help acquire new customers.

From there, choose either Bid higher for new customers or Only bid for new customers. Either option uses your value adjustments to differentiate between new customers and high-value customers. 

Your ad copy and targeting should determine whether you run a campaign focused solely on new customers or one that includes both new and returning customers.

How to use retention goals to re-engage lapsed customers

To set bidding parameters for lapsed customers, or customer retention, return to the customer lifecycle optimization within the Goals section of the account. Scroll past the new customer section to find both lapsed customers and lapsed customers (high value). 

These lists will only populate if you have segmented customer data to support both. It’s worth noting that, for lapsed high-value customers, Google asks for data on existing high-value customers, suggesting predictive bidding to a lookalike audience may be used here as well.

Like before, Google will pre-populate a suggested value and may also suggest lists. Review these before saving to ensure the data is accurate. The additional value you add to the incremental conversion value will appear in certain columns as conversion value attributed to the campaign using this bidding model.

Bidding to lapsed customers is currently only available in Performance Max campaigns and isn’t yet available across Search. In campaign settings, go to Customer retention and select Adjust your bidding to help re-engage lapsed customers.

We don’t yet have a list defined for lapsed customers in the above account, which is why the message in the yellow box appeared.

Because this bidding is limited to Performance Max, lapsed customers may see ads across Search, Shopping, Display, YouTube, Discover, Gmail, and Maps, depending on the assets used and whether a feed is included. 

If you’re running a campaign specifically bidding higher to target lapsed customers, make sure your ad copy and messaging are tailored to that audience.

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Lifecycle bidding only works if your strategy does

Lifecycle bidding only works if your inputs are sound. The quality of your customer match lists, how you define value, and how you measure performance determine whether these goals improve results, or just make them look better on paper.

Used correctly, they help prioritize the customers that matter most and re-engage those worth winning back. Used loosely, they can just as easily distort your reporting and mask what’s really driving performance.

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