Customer acquisition and customer retention have often been treated as two sides of the same coin when it comes to company growth. After all, keeping customers happy and having them return again and again is the ultimate goal for any business. But despite their perceived interdependence, these two areas are actually quite different in their own right.
Acquisition refers to getting new customers or users; retention is about keeping them coming back so they’ll continue to purchase your products or services over the long term. Each strategy has its own set of challenges and opportunities, which we’ll explore in this blog post.
|Customer Acquisition and Retention|
What is Customer Acquisition?
Customer acquisition refers to the strategies and tactics companies use to get new customers. The goal of customer acquisition is to bring more paying customers into your business—in other words, to increase your customer base. The strategies for acquiring new customers will vary based on a number of factors, such as your industry, business model, and company size.
For example, if you’re a B2B company, you may want to focus on different acquisition strategies than if you’re a B2C company. Likewise, if you’re a small business, you’ll have different acquisition strategies than a Fortune 500 company. There are many ways to acquire new customers.
You can use traditional marketing strategies like paid advertising, public relations or PR, content marketing, search engine optimization, email marketing, and more. Acquiring new customers is often a significant challenge for startups and growing companies, particularly when figuring out how to do so with limited resources.
What is Customer Retention?
Customer retention is all about keeping your current customers happy, so they continue to buy from you and recommend your company to others. Retention strategies often focus on identifying and resolving issues before they lead to cancellations or other negative actions by customers. Customer retention is much more challenging than customer acquisition because you’re trying to get someone who is already maintaining a relationship with your company to remain loyal.
Retention strategies can include things like increasing the effectiveness of customer service, managing your customer complaints, identifying and resolving issues quickly, and offering rewards or incentives for referrals. While acquisition strategies focus on getting new customers, retention strategies are all about keeping the customers you already have.
Strategies for Acquiring New Customers
There are dozens of strategies for acquiring new customers, and the specific approach your company uses will depend on a number of factors. Your company’s overall strategy, your industry, your business model, your product or service, your marketing budget and more are just a few examples of factors that will impact your acquisition strategy. But here are a few general tips and approaches to acquiring new customers:
1. Conduct customer research - Before you dive into acquisition strategies, make sure you understand the customers you’re trying to acquire. Conduct market research and surveys to learn more about your target customers, their needs and desires, and how they’re currently solving their problems. Customer research will help you understand what your customers want, as well as how and where they’re getting information about products and services like yours.
2. Narrow down your customer segment - Once you’ve done your research and have a better idea of who your customers are, it’s time to narrow down your segment. You don’t want to try to appeal to everyone; the more specific you can be about who you’re trying to acquire, the more focused you can be on acquiring them.
3. Create a customer acquisition strategy - Once you have an idea of who you’re trying to acquire, it’s time to create a strategy for how you’re going to get them. Your acquisition strategy should include the channels you’ll use to attract new customers, the cost and expected return on investment of those channels, and the desired results.
Strategies for Retaining Customers
Retention strategies will vary based on your company, product or service, and current customers. However, there are a few general suggestions that can help you retain more customers:
1. Know who your best customers are - One way you can identify retention strategies is by making a list of your best customers. Why are they your best customers? How do they use your products or services? What do they like about your company? What do they want to see more of? What don’t they want to see? Once you know who your best customers are, you can use that information to inform your retention strategies.
2. Find ways to keep your customers happy - Another way to retain customers is by finding ways to keep them happy. This includes things like managing customer complaints effectively, increasing the quality of your customer service, and making adjustments to your products or offerings based on your customer feedback.
3. Offer rewards for referrals - Another effective way to retain customers is through referrals. You can offer incentives for customers who refer your products or services to others, and you can offer incentives for others who are referred to your company.
Customer acquisition and retention are two very different strategies, even though they often go hand in hand. Acquisition refers to getting new customers, while retention refers to keeping the customers you have happy so they continue to buy from you. There are a variety of channels you can use to acquire new customers, but there are many ways to retain customers. Conduct customer research to better understand your customers, find ways to keep your best customers happy, and offer rewards for referrals to retain customers.