Customer Acquisition VS Customer Retention
WHAT IS CUSTOMER ACQUISITION?
Customer acquisition is the process of acquiring new customers. Acquisitions are one of the most common growth avenues for companies and businesses as they are the most direct way to grow their customer base. It simply means acquiring new paying customers. Acquired customers may lose interest at any time. Equal importance should be given to making the customer stay for a longer period.
ADVANTAGES OF CUSTOMER ACQUISITION:
1. Expands the business
2. Increase brand awareness
3. Increase sales and revenue
WHAT IS CUSTOMER RETENTION?
Customer retention is the set of activities companies use to increase the number of repeat customers and increase the profitability of each existing customer. Customer retention rate refers to the percentage of customers who stay with a company over a period of time. Customer retention is very important as the cost of acquiring new customers is much higher than retaining existing ones.
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ADVANTAGES OF CUSTOMER RETENTION:
1. Cheaper than customer acquisition
2. Loyal customers and more profit
3. More referrals
HOW DO ACQUISITION AND RETENTION DRIVE BUSINESS GROWTH?
1. THE ACQUISITION HELPS IN GROWING YOUR CUSTOMER BASE:
If there are no customers, there is no need for a company to exist. Customer acquisition grows your customer base to the next level and enable you to unlock even more business opportunities.
2. RETENTION MAXIMIZES THE LIFETIME PERIOD OF THE CUSTOMER:
Loyal customers who buy regularly are more worth than the one-time buyers. Plan a strong customer retention strategy to make them always stay in your brand. Retention strategy also maximizes the Customer Lifetime Value (LTV).
3. THE ACQUISITION IS MORE EXPENSIVE:
Customer acquisition is very expensive when compared to customer retention. Research shows that customer acquisition cost is 5 times higher than retention.
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