While it used to be true that retaining customers was cheaper than acquiring customers, an increase in ad channels over the last few years has made the acquisition of new customers more attainable than ever before. With marketers hyper-focused on cost-efficient strategies to bolster sales, acquiring customers has become the name of the game.
A study conducted in October, 2008 showed that 58.2% of US marketers considered acquiring new customers (expanding their target market, generating new sales leads, and taking customers from their competitors) their most important marketing objective. In comparison, only 26.6% of US marketers cited lead generation and 15.4% cited brand building as their primary objectives. Further research done earlier this year shows that B2B companies have an even wider gap, with 62.2% focusing their marketing strategy for 2009 on acquiring new customers, 20.6% focusing on customer retention, and a mere 12.4% focusing on brand building.
The Next Step
With about 60% of US marketers focused on acquisition, you should run out and start acquiring new customers too, right?! Wrong. Well, sort of. Obviously having a strong focus on customer acquisition is a good strategy to help drive business, but what you must not forget is that if everyone else is pushing to get new customers, they are pushing to get YOUR customers. Even if the financial case for retaining customers is not as strong as it used to be, there’s something to be said about the fact that your current customers are incredibly valuable.
Think about it this way, when you advertise your business and your products/services, what are you doing? You are trying to convince strangers to trust you- to trust that your products/services are everything you claim, to trust that their payment information will be safe with you, to trust that they will get what they bought when they want/need it. If you’ve done your job correctly, your current customers already know all of this. All you need to convince your current customers to do is remember you when they are ready to buy again because they already trust you. Therefore, you really should start with retaining customers before looking at acquiring new customers.
Resources for Retaining Customers
Resources for Acquiring Customers
With all of these tools you’re well on your way to developing strong customer retention and acquisition strategies to sustain your business for years to come!
-Kate Pierce eCommerce Specialist