There are plenty of marketers having contradictory thoughts for these both the terms – Customer Acquisition & Customer Retention. When it comes to customer acquisition, we can say that it’s pretty admired among marketers as there is kind of satisfaction in gaining a new customer. But if we talk about customer retention, it’s good for well established businesses to focus on the efforts of retention.
What does it mean by Customer Acquisition & Customer Retention?
Customer Acquisition is a procedure utilized to bring a new customer to a particular brand. Whereas Customer Retention refers to the kind of activities any organizations perform to shrink customer defection.
Why it’s preferable to focus on Retention rather than Acquisition?
It’s good to have fresh customer, but the new revenue comes from the existing customers who are already aware about your personal interest, personal likes and dislikes, personal care products and other activities.
As per the Bain and Company, a 5% boost in customer retention can raise a business’ profitability by 75%. Gartner Group statistics inform us that 80% of your business’ future profits will appear from just 20% of your existing customers.
Here are some reasons why you should care about the existing customer.
- With the existing ones, trust and confidence has already established. They have already performed transaction with your firm. So if they feel good about your services or your brand, they will definitely do more than one transactions. In this way you will get better conversion rates.
- You need to spend less time in convincing them that you are the one to deliver best service and products because they already know you. So you need not to worry about high marketing cost and advertisements.
- It takes lot of time and lot of efforts to find new customers from the ever changing market. But if you sell anything to your existing customers, it’s a fast process. So it’s beneficial to speed up your selling process on the go if you sell to the existing one.
- Selling to existing customer will always be less focused on price because you need not to attract them with so many discounts and other skims. So you can easily convince them with your great service that ultimately helps you in increasing your profit.
According to Marketing Metrics it’s very easy to sell to your existing customers compare to find new ones and attract them with number of efforts. Attracting new customers will cost your company six to seven times more than maintaining an existing consumer.
How to increase Customer Retention?
- Prevent your VIP customers from leaving your business.
- Reward your most profitable consumers and provide incentives.
- Target your customers with special offers.
- Scheduling time with your admired customers.
- Personalize your outreach and apply follow up strategies.
- Use of online marketing channels like email, mobile messaging, social media marketing, mobile and web push notifications, etc.
Loyalty of customer is priceless and can result in more customer acquisition for your business. Customers will always gossip and they will always listen what other consumers’ experiences are. If you delight your existing consumers well, you will constantly obtain the advantages. After all, your customer base is a great source of referral s for new customer base.
In order to assemble a great business, you will have to manage both very well and equally, whether its customer acquisition or retention.