Which Is More Important: Customer Acquisition or Customer Retention?

Marketers, salespeople, and significant decision-makers need to carefully consider customer acquisition and customer retention in the business world. Are you aware of these strategies?

What Is Customer Acquisition?

Customer acquisition is the process of earning new customers, often through sales, marketing, advertising, referrals, and other strategies. With it, you can expose your brand to more people, increase revenue, and expand the business.

What Is Customer Retention?

On the other hand, customer retention is all about keeping the customers you already have. So, its main priority is ensuring that your existing customers remain subscribed to your services – or will come back for subsequent purchases in the future.

Customer Acquisition or Retention

Customer Acquisition Vs. Customer Retention

These strategies are valuable, but which one is more important to a growing business? Let’s see them from different aspects.


First, understand that customer retention is far less costly than customer acquisition. Customer acquisition generally requires significant investment to succeed. Depending on your strategy, you might pay for ad placements, long-term marketing assets, or the salaries of salespeople reaching out to new people. No matter what, you’ll be spending thousands of dollars. But with customer retention, some of the best strategies won’t cost you much of anything; simply providing better customer service or communicating more frequently can boost retention rates.

Short-Term Benefits

Now let’s look at the short-term benefits of each strategy. Customer retention is extremely valuable for the earliest stages of your company’s growth; when you have just a few customers, every customer matters, and you can’t afford to lose them. Of course, customer acquisition is also important; otherwise, you’ll be stuck in this stage of growth indefinitely.

Long-Term Benefits

With long-term benefits, customer acquisition may have a slightly higher payoff. The more you invest in your company’s branding, marketing, and advertising, the more efficient your system will become – and the higher the growth rate you can achieve without significantly increasing your investment. That said, customer retention is a valuable strategy no matter how long you use it or how much your business grows.

Propensity for Growth

When it comes to growth, customer acquisition has an edge. With the acquisition, you’ll have the opportunity to reach more customers, expand the business into new areas, and ultimately secure more revenue. Customer acquisition is the only natural way to grow. However, there’s an essential caveat here; if you don’t have a solid customer retention strategy in place, that extra acquisition will not matter. For example, if you’re gaining 50 new customers each week, but your customer churn causes you to lose 45 customers each week, you’ll barely be growing at all.

Is Customer Retention More Significant?

So which is more significant, customer acquisition or customer retention? If you want your business to succeed, you’re going to need both. But the edge goes to customer retention. Without customer retention, your customer acquisition strategy will lose value, since you’ll lose customers at a rate comparable to the speed you’re gaining them. It’s also much less expensive and more efficient, leading you to more sustainable returns.

If you can only focus on one, focus on customer retention.

How to Establish Customer Retention?

Hereunder are the steps you can take to establish or improve your customer retention.

Product/service quality

The obvious step to take here is to improve the quality of your products and services. If you sell a fantastic product that changes someone’s life for the better, and you’re only charging $1 per month, your customers will never leave. So keep making your offer better, so your customers will never want to leave.

Better customer service

It’s not just about the quality of your core products and services. It’s also about your quality of customer service. When something goes wrong, customers need to trust that you’ll work to resolve the issue. Even one bad experience can make a customer leave.

Ongoing communication

It also pays to improve top-of-mind awareness with ongoing communication. Keep in touch with customers with drip email campaigns, company newsletters, and engagements on social media. It’s an easy way to keep people connected to your brand.

Loyalty rewards

Customers are much more likely to stay with your brand if they have an apparent, logical reason to do so. That’s why loyalty rewards are so significant. In addition, loyalty programs and gifts for loyal customers will naturally encourage more retention.


Finally, make sure to collect and act on customer feedback in every business area. Your customers will tell you if there’s something wrong or something missing, so it’s imperative to listen to them and take them seriously. Conduct customer surveys regularly to stay “plugged in.”

With a solid customer retention strategy in place, your business will have a strong foundation on which it can build. From there, you can work on customer acquisition and gradually expand your business to reach your long-term goals.

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