What is customer acquisition?
Adding customers is vital for the success of a business as it keeps the business cash-flowing, allowing it to grow. Therefore, considerable effort towards customer acquisition can help your business grow steadily and thereby increase your revenue. In simple terms, customer acquisition is a process that helps bring in customers to your company or product.
Customer acquisition is something that businesses must consider during the stage of business planning. It is a critical component in helping a company take off. The more customers acquired by a company, the better its chances of success become. A steady stream of income will be available to initiate business operations and even invest in other ventures to grow the business.
The customer journey is broken down into a funnel where the buying process is seen from the customer's perspective. After the customer becomes aware of your business, they are likely to allow the service or product to come within their consideration. Then they decide on purchasing your business's service or product.
Good customer acquisition strategies usually result in satisfied customers and more referrals. However, these strategies also determine your business success; thus, it's essential to implement the right marketing mix for attracting new people.
What is customer retention?
Customer retention is also referred to as customer loyalty, customer satisfaction, or simply happiness. Customer loyalty is a core component of any business, as it helps to ensure that several customers continue to stay with you for the long term. However, the true definition of customer retention regarding marketing or sales might be a little different.
Customer retention is the process of increasing the likelihood that a customer will continue to be loyal or buy from your brand again in the future. The aim is to ensure that you engage with as many customers as possible to remain buyers for life. Even if you have a business with an upmarket clientele, you need to make sure that you have a system in place that helps you retain your best customers and allow them to reuse your products and services again and again. It's an expensive business; trundling off new clients all the time and keeping existing ones happy is cheaper as well as easier!
The idea of having a recurring stream of revenue is not new. However, sustaining it is not as easy as it sounds. The secret to achieving this goal is by targeting and retaining your best customers. While you may be trying everything in your power to gain a good customer, you should also do everything to keep a good customer.
Acquisition or retention - what to choose?
When it comes to customer acquisition vs. customer retention, both are unavoidable facts for any business. Acquiring customers is highly the factor of starting a business and is heavily reliant, especially early. However, retaining customers is a much smarter move to sustain your business in the long term.
While acquiring a customer from scratch is hard work, it can be rewarding in the long run. Why? Because these are new leads that you have been able to turn into paying customers.
On the other hand, if you are trying to retain a customer, your work is done. They are already familiar with you, and they trust you. Now all that's left to do is to keep them coming back for more. Of course, it's your job to keep them satisfied (so they don't leave), but that's still easier than having to convert a new customer.
By now, it's no secret that customer acquisition and customer retention go hand in hand when it comes to business growth. However, as much as both are important, focusing on one should never come at the expense of the other. Either way, you should always focus on acquiring new customers, and, at the same time, your main goal is to be able to retain current customers. The thing is, there are different approaches that you can follow for each strategy, and it all comes down to understanding your business better and where you are with your marketing goals right now. Even if you decide to focus on a single aspect, you must balance both elements.