5 Reasons Brands Should Focus on Retention More Than Acquisition

Guest post 1.6.2021. Reading Time: 5 minutes
Customer retention strategie
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The battle between customer acquisition and retention is never-ending. Customer acquisition is a popular part of most marketing strategies, as it provides the satisfaction of getting a new customer for your brand. 

However, did you know that acquiring a new customer can cost, on average, 5 times more than keeping one? And depending upon your industry, the cost can go up to 30 times. Crazy, isn’t it?

On the flip side, working on customer retention can boost your profits by 25% to 90%. Having a huge customer base is obviously appealing, but it is more important to maintain good relationships with the ones that you already have. 

The power of loyal connections is immense. So, in this article, we are going to see why exactly customer retention is necessary and how your existing customers are the ones who make your business successful and thriving.

What is customer retention marketing?

Although customer retention may sound like just another jargon, it is crucial for any eCommerce company’s sustainable growth and development. Roughly speaking, retention marketing is all about focusing on repeated purchases from existing customers and building personal connections.

Customer retention strategies
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The key objective of retention is to increase the frequency and the order value of repeated customers and enhancing their long-term value. It is one of the most crucial elements of your overall eCommerce marketing strategy.

Strategies like providing special offers, robust email marketing, loyalty programs, and killer return policy can make your customers want to stay loyal to your brand. Thus, improving your overall customer retention rates. To make this a success, you’ll need a robust return policy template to get started.

5 reasons for customer retention over acquisition

1. Saves marketing costs

It’s a simple fact. Existing consumers are far less expensive to acquire than new ones. Just think of all the money you need to spend on marketing to drag new customers to your store or website. Considering that your marketing campaigns succeed, there is still no assurance that the generated leads will convert into paying customers.

Customer acquisition costs are ever-rising and you have to compete with an end number of brands for ad space. However, repeat consumers carry a greater conversion rate. They are nine times more likely to buy from you, as they already know what your brand has to offer.

2. Builds personal connections with customers

Once you gain a customer, your relationship with them has started. They now know about your business and you know about them. You know their interests and the products that they prefer. This information can be used to market your products more effectively and provide personalized offers.

Also, customers who frequently purchase from you would know which areas of your business could be improved. Taking their feedback will help you discover new opportunities and lead to increased retention and sales. In the long run, such customers will be more susceptible to paying premium prices.

3. Increases revenue and decreases costs

For a majority of businesses, 80% of future revenue comes from 20% of repeat customers. That’s because existing customers don’t require hardcore selling efforts. In fact, the probability of converting a current customer to buy from you again is 60-70%, while the chance of converting a new lead to buy is just 5-20%.

Long-term clients are less expensive to serve, need less hand-holding, and ease your price monitoring efforts. In addition to reducing your ad expenses, marketing to current customers often provides a chance to show your dedication to rewarding loyalty – a pleasant brand boost.

4. Improves onboarding process

The onboarding process is the process by which potential customers gain the information, skills, and practices necessary to maximize the value they obtain from your product. Folks that are new to your site are still in the awareness stage of the marketing funnel.

They need some time to consider alternatives, compare prices, and see the reviews before committing to your brand. On the other hand, your existing customers have already gone through all these stages and know how awesome you are. They have already been through the consideration stage and onboarding process. 

5. Converts customers into salespersons

People talk. They love to chatter about their experiences with different brands. When you treat them well, they are definitely going to refer your products and services to their friends and family members. 

Thus, in the long run, you will learn that customer retention = customer acquisition. After all, word-of-mouth marketing is the most effective form of marketing, not to mention that it’s completely free. 

You can also promote acquisition from your existing consumers by rewarding them for referring their family and friends. This is the exact reason why retention can increase your profit by 25% – 90%.

How to calculate customer retention

  1. Select a time period, preferably a year. Write down the number of customers you had at the beginning of that period, at the end of that period, and the new customers acquired.

  2. Now use this formula: Customers at the end of the selected time period minus customers acquired during that time period – divided by customers you had at the beginning. Multiply this number by 100. This will be your customer retention rate.

  3. For example, say that you began with 500 customers, acquired 100 new ones, and were left with 450 customers at the end. Your customer retention rate will be: [(450-100)/500] X 100 = 70%.

Most popular customer retention strategies

  1. Listen to your customers.

    Collect feedback and actively listen to what they have to say about their experience with your brand. Only they can tell you what they exactly want. Was your product able to meet their desires? Was it value for money? Ask, listen, implement, and improve.

  2. Provide special offers.

    The more you know about your customers, the better you can customize offers for them. A CRM software allows you to go through a customer’s buying history. This helps decide what type of deal will be more enticing and will retain better in the eyes of your consumers.

  3. Appreciate them for being a customer.

    This is about making sure that you take care of your customers even after making a sale. This can include one-on-one customer support, follow-ups, discounts, rewards, free assistance, and personal greetings.

  4. Run loyalty programs.

    A loyalty scheme encourages customer retention by rewarding consumers who consistently use the company’s goods and services and refer others to do so. Perks like free upgrades, access to unreleased products/samples, special merchandise and the like can be provided to loyal customers.

  5. Provide amazing customer service.

    You might provide the best products or run the finest advertising campaigns in the universe, but if you don’t provide good customer service, it will most certainly reflect negatively on your brand.

    Live chat and 24*7 email support are excellent ways to give your customers a memorable after-sales experience. After all, word-of-mouth marketing is the most effective form of marketing, not to mention that it’s completely free.

    You can also promote acquisition from your existing consumers by rewarding them for referring their family and friends. This is the exact reason why retention can increase your profit by 25% – 90%.


Despite the fact that attracting new customers is a sign of success, losing loyal recurring customers is often too costly. So, while you’re thinking about ways to boost the acquisition of new customers, retaining your current customers can generate higher ROI.

Businesses that care about their existing customers are much more likely to have lifelong customers. Working on this relationship will undoubtedly pay off in the long run and get you to the numbers you want to see!

Adeendren Iyan