Balance Customer Acquisition and Customer Retention

[Erika Jones]

In any business, there should be a balance between the two strategies customer acquisition and customer retention. In the customer acquisition process, a new customer is gained. Customer acquisition is beneficial in gaining new customers also it makes a wide base. In contrast, customer retention generally less expensive and builds loyalty and the brand. The customer retention maintains a long-term relationship and long term costs are regained through sales. For the effective analysis of the business, you should analyze the ROI for both customer acquisition and customer retention. If the ROI ratio is bad in either approach then it implies that more research is required for the improvement so to achieve results as per market demand.

 

[Maxwell83]

In any business, there should be a balance between the two strategies customer acquisition and customer retention.

That is over generalising - I've been involved in two different businesses in which the service provided will generally never be needed by the same customer twice. They can recommend friends/family, but they will not be back themselves. Focusing on retention there would have just been silly.

You need to know metrics are important for YOUR business, there is no hard and fast rule.