Attracting new customers is hard work. Once you have them, don’t make the mistake of letting them slip through the net. So many small businesses focus singularly on customer acquisition, completely unaware of the importance of customer retention. If you’ve heard these two buzzwords, you may wonder how they differ or question when the best time to focus on customer retention is. Here are the answers.
The difference between customer acquisition and customer retention
Customer acquisition is about attracting new customers. Customer retention is about keeping them.
Your marketing strategy to acquire customers will be different from that of retaining them. To attract new customers, marketing strategies can include traditional advertising and online advertising like social media campaigns and landing pages. To retain those customers you may switch to email marketing campaigns and loyalty programs that encourage customers to continue buying from your company.
Why you should implement customer retention campaigns
Marketing to an existing customer is cheaper than selling to a new customer. On average, customer retention costs 7 times less than customer acquisition. Existing customers are also more likely to buy from you again. The probability of selling to an existing customer is 60-70% compared to 5- 20% with a new customer. That means you can increase your sales by at least 40%.
When should you move from customer acquisition to customer retention?
As a new small business, you’ll direct all your marketing efforts at acquiring customers. Once you’ve built a solid base of customers, you can start to engage them. There’s no specific number of customers to acquire before you launch customer retention programs. The sooner you start nurturing existing customers, the better.
Customer retention is all about creating brand loyalty. Building a loyal client base will keep customers coming back. This doesn’t mean you should neglect customer acquisition campaigns. The two marketing strategies are equally important and should run side by side to yield the best results.