Is Customer Acquisition or Retention More Important?

Is Customer Acquisition or Retention More Important? Which is better? client acquisition or customer retention? Few experts say that, in fact, this is a false question, both are critical for long-term growth and sustainability.

Nonetheless, acquisition consumes the majority of a company’s time and resources. Efforts to enhance retention are frequently pushed to the side or completely ignored. In actuality, for certain business models, retention gives a far higher return on advertising spend—and is typically much more cost-effective than its counterpart. A lot of questions are there in the minds of people: Is Customer Acquisition or Retention More Important?

Marketers have different opinions on which is more important: customer retention or new customer acquisition. Customer acquisition is particularly popular among sales marketers, owing to the sense of accomplishment that comes with getting a new customer and ultimately witnessing the fruits of one’s labour effort spent on marketing campaigns. Is Customer Acquisition or Retention More Important?

The fact is that, especially for established organizations, it’s generally best to concentrate your efforts on customer retention. After all, what good is it to spend time, effort, and resources acquiring customers only to miss out on the benefits of developing a connection with them?

The key reasons why customer retention is more profitable than acquisition are discussed below. Let’s start by understanding the basics.

Is Customer Acquisition or Retention More Important?
Is Customer Acquisition or Retention More Important?

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What Is Customer Acquisition?

Customer acquisition simply said, is the process of attracting new clients. It entails enticing potential customers to your company and then persuading them to purchase your goods or service. Customer retention, on the other hand, is what happens following the acquisition: you want to keep the clients you’ve gained during your entire hard work.

How to Improve Customer Acquisition

Is Customer Acquisition or Retention More Important?
Is Customer Acquisition or Retention More Important?

Your customer acquisition sales strategy is mostly determined by your business model and objectives or you can say the mission and vision of the company. It is an important and crucial aspect of a company’s growth. Focus on establishing a new client’s faith in your abilities to serve them and ensuring their success with your products and services. To avoid losing consumers, the key is to provide exceptional customer service from the outset. Consumer service is frequently used to gauge customer satisfaction. Customer attrition, or the loss of customers, can be reduced by providing quality and sincere customer service.

Boosting your customer base is the quickest approach to expand your business and achieve short-term goals like increasing revenue. Keep in mind that this is only one strategy for boosting revenue. Other strategies exist, such as upselling to an existing consumer.

Customer acquisition will always be a critical business driver. Create a quality experience for your customers and give them perfect information to grow your customer base. Customers should be satisfied with their encounters with your company at all times. Customers that are satisfied with your service are more likely to support your company’s growth. Customers will buy from you again, and they will be eager to tell others about your products or services. Building brand trust is an ongoing process that your company should continue to work on.

What is Customer Retention?

Is Customer Acquisition or Retention More Important?
Is Customer Acquisition or Retention More Important?

Customer retention refers to the activities and measures taken by businesses and organizations to reduce customer churning. Customer retention programmes are designed to assist businesses in retaining as many customers as possible, generally through customer loyalty and brand loyalty campaigns. It’s vital to remember that customer retention starts with the first interaction a customer has with a firm and continues throughout the relationship’s lifetime.

The Importance of Customer Retention

Small enterprises and startups, especially those with limited resources, must emphasize the least expensive and fastest-to-implement means of expansion. Getting existing customers to return and re-enticing lost customers is generally less expensive than acquiring new customers. According to an infographic created by Invesp, acquiring a new customer costs five to 10 times more than keeping an existing customer.

Customers who already have a favourable opinion of your company are more likely to become customers than new customers who are unfamiliar with your brand. Selling to a current customer has a probability of sixty to seventy per cent while selling to a new customer has a probability of only five to twenty per cent.

One of the most effective ways to assess the dependability of your company’s service is to look at customer retention. Businesses with strong customer retention rates do well because their customers value the services they give. Customer experience is viewed as a critical component in driving customer loyalty and retention by over 89% of businesses.

Maintaining constant growth and financial planning requires a high level of customer retention. Clients that have been with you for a while demand less upkeep than new customers. Furthermore, high customer retention rates can be a great source of new customers through referrals and positive reviews.

Businesses frequently allocate too much effort to customer acquisition while allocating insufficient resources to customer retention. Consumers who have been with you for a while are 50% more inclined to explore new products and spend 31% more than new customers. By increasing client retention by 5%, profitability can grow from 25% to 95%. While client retention is sometimes neglected, it is a critical aspect of a company’s success or failure.

How to Improve Customer Retention

Is Customer Acquisition or Retention More Important?
Is Customer Acquisition or Retention More Important?

Your marketing should be oriented toward targeting a group of customers with a message or special offer to boost your company’s client retention. Your organization should make every effort to get a response from them. This may necessitate paying an advertising or social media network to gain access to and target a certain group of clients. This is especially true for new businesses with a small customer base.

Once your company has a large database of clients, it will be able to leverage that information for marketing, cross-selling, and upselling. The majority of firms rely on their current systems.

One of their most precious assets is their customer base. This is due to the fact that it contains critical company information. Names, email addresses, and phone numbers are usually included in a client database. Businesses can use this information to reach out to their target audience. In comparison to advertising for new customers, the cost of reaching out to your target demographic is usually relatively minimal. Customer loyalty programmes, social media marketing, and email marketing are all options for reaching out to your target demographic.

Your customer retention percentage will skyrocket if your company continually provides excellent service and consistently exceeds expectations. Implementing a customer segmentation plan allows you to retain and nurture client relationships at each level, allowing you to better serve your consumers.

Your company will want to know who its “VIP customers” are. Customers that spend a large amount of time and money with your company are known as “VIP customers.” Your company can gain insight into how to convert more customers into VIP customers after your customer segments have been established. This specialized method outperforms a traditional, catch-all marketing effort in terms of results and personalization.

When a customer has a problem or has a query about your products or services, reach out to them to maintain your company’s relationship with them. Customers appreciate it when businesses demonstrate real concern for customers and want them to have positive experiences with their goods and services. Furthermore, your business will have a lower attrition rate and more pleased clients.

Is Customer Acquisition or Retention More Important?
Is Customer Acquisition or Retention More Important?


In order to build a solid client base, newer firms and startups will need to focus on customer acquisition. Client retention becomes substantially more crucial in the growth of your company if you have enough customers to collect relevant data from your customer base.

One of the most effective ways to meet your customers’ demands and supply them with more personalized, targeted information is to implement a customer segmentation plan. It’s critical to recognise your VIP consumers. Your company will have a better understanding of how to convert customers into VIP customers who will spend considerable time and money connecting with your brand.

It’s critical to continuously give great experiences and relevant information to your customers. Consumers will be more satisfied with your firm as a result, and you will keep more customers. It will certainly become easier to obtain new clients if your company has established a reputation.

So there you have it – customer retention is vital for the success of your business, and focusing your efforts on it can massively benefit your business. Reward Cards App provides a suite of reward-based marketing tools designed to increase your customer retention by saving them money on their day-to-day purchase. If you’re interested in finding out more about how the Reward Cards App can benefit your business, contact us at