There are lots of studies, reports and opinions that focus on whether to spend time and money on retention or acquisition efforts.
The reality however is that you need to do both. But you need to be able to balance not only your efforts but the expenditure on each of these critical marketing strategies.
There’s no clear-cut formula on how to do this as each company is different with its own unique objectives. Some businesses that depend on one-time purchases may be better served by focusing the majority of their efforts on acquisition strategies. While on the other hand, those that rely on repeat transactions may need to place a higher priority on retention.
Acquiring new customers is absolutely essential for the sustainability and growth of every company. Knowing who your current customers are, what their needs are, and where they are most likely to look for information will provide insight as to where and what media you can use to reach out to new customers.
It is often reported that it can cost five times or more to attract a new customer as to retaining an existing one. That is why it is essential for you to know where to place your marketing dollars to get the best returns for your investment. Remember you are basically starting from scratch in reaching out to these consumers. They may not know who you are or have had any experience dealing with you, so ensuring your messaging is targeted specifically to them will help mitigate those extra dollars that must be spent.
If you have a good solid customer base then focusing on retention strategies will give you a better return on investment. The key of course is that you are not interacting with a cold prospect. While they may be familiar with your business, you cannot take that for granted.
How you retain customers will depend on what added value you can offer. Loyalty programs, special perks, bonus offers, or cross-selling with compatible items are just a few of the tactics that can be used.
One of the biggest advantages of providing your customers with an exceptional experience is the fact that happy customers can become your biggest influencers. This leads to word-of-mouth advertising, which studies have shown that when making buying decisions a large percentage of purchasers rely on referrals from friends, family and close acquaintances. The big advantage … that’s free advertising.
Acquiring customers is the lifeblood of every company and retention is what keeps companies sustainable. In actual fact, it should not be acquisition versus retention but acquisition and retention, you cannot have one without the other.
Joe Smith is a communications consultant and an accomplished fine artist. He can be reached via email firstname.lastname@example.org