Customer Acquisition vs. Customer Retention 

What's the difference? 

 Customer acquisition and retention aren’t new concepts, despite this a lot of people aren’t aware of the difference between them. Customer acquisition centres around attracting new customers using Marketing and Sales techniques. Retention is maintaining existing customers’ business which can rely more heavily on Customer Success teams. 

Why Prioritise Customer Acquisition? 

Increase brand awareness 
One benefit to prioritising customer acquisition is increasing brand awareness. Brand awareness is how well your customers know your brand and its message. Being the first choice for customers because of your shared principles is especially beneficial as it creates a personal connection. Enhancing your brand awareness strengthens the relationship between you and your customers allowing you to build trust. Simply displaying brand values openly is attractive to many consumers – 79% saying they’re more likely to buy from brands with the same ethics as them! 

More customers mean more income 

The main advantage of customer acquisition is an increase in customers leading to more revenue. In turn your business will see more active users and potentially more new customers becoming repeat spenders. An integral factor being more customers means they will market your business through word of mouth, the Ogilvy Cannes study citing 74% of consumers see word-of-mouth as a key influencer in their decision to buy. 

Why Prioritise Customer Retention? 

Add value to your customer base 

Focusing on customer retention adds to your CLTV (Customer Lifetime Value). Prioritising customers who contribute more to your business will allow you to gain the most return business from a loyal and reliable customer base. With a valuable customer base, you gain more income to spend on targeted marketed campaigns, as well as any more expensive acquisition efforts. 

Reduce customer churn 

Your churn rate is the number of customers that stop doing business with you over a certain time period. Reducing customer churn means that the money you spend on Sales and Marketing techniques isn’t being wasted. Prioritising your existing customer base will guarantee that you’re not running in place. According to Zendesk’s Trend Report, half of consumers will switch to a competitor after just one bad customer experience. 

Why You Should Focus on Both

As you can see, acquisition and retention serve distinct purposes. One without the other leaves your business underperforming and struggling to grow. In the short term, acquisition is always required to bring in new business. But for long term growth, retention will add more value to your business overall. To summarise: To avoid stagnation and improve your company – utilise both acquisition and retention together. 

The Growth Formula

To achieve growth in both acquisition and retention, many companies can struggle to strike a healthy balance. Using the Growth Formula and our Playbook you can maintain an effective strategy to grow your business.

The formula itself is simple yet is often overlooked. Driving customer acquisition using our Funnel whilst focusing on CLTV with our Flywheel provides the perfect basis for meeting your long-term sales goals.

The Growth Playbook puts this into a variety of actionable tasks. Focusing on both acquisition and retention, each tile of the playbook gives you a goal for your growth in a different category.