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According to an INVESP study, 44% of companies focus on customer acquisition, while only 18% favour customer loyalty and only 40% attach equal importance to customer acquisition and loyalty.

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While it is extremely important to continually acquire new customers, research shows that retaining existing customers is both less expensive and significantly underutilized. Let’s return to the benefits of a retention strategy by comparing trends and statistics of customer acquisition strategies versus customer retention strategies.

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Read this article and find the keys to balance your approach and excel in both areas.

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Retention vs Acquisition: Why focus on customer loyalty?

Activation vs rétention clients : statistiques et tendances‍Quelles opportunités marketing en concentrant sa stratégie sur la rétention clients ?‍Comment savoir si je dois prioriser une stratégie d’acquisition ou une stratégie de rétention clients ?

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Customer Activation vs. CustomerRretention: Statistics and Trends

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Invespcro has published an infographic with many statistics on customer acquisition and retention.

These statistics were compiled from research from various sources. Here is a summary of his statistics and the lessons they teach us:
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• Acquiring a new customer can cost five times more than retaining an existing customer. This means that if you don’t focus some of your efforts on customer loyalty, you’re missing out on an inexpensive way to drive business growth.

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• Improving customer loyalty by only 5% can result in a 25-95% increase in profits. In addition, 70% of respondents in compiling Invespcro data said it was easier to retain existing customers than to acquire new ones.

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• The success rate of a sale to an existing customer is 60-70%, while the success rate of a sale to a new customer is only 5-20%. existing customers are also 50% more likely to try new products and could spend 31% more than new prospects.

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Here is a panel of additional statistics from research on customer retention and acquisition strategies:
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• A customer experience agency found that loyal customers are five times more likely to buy back a product, five times more likely to forgive defects in a service or product, four times more likely to recommend it and seven times more likely to try a new offer.
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• According to the CallMiner Churn Index 2020, US businesses are losing $136.8 billion a year due to consumer churn rates. American Express found that 33% of customers are considering switching after a single case of poor customer service.

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As you can see, this data shows us that customer retention is just as important, if not more important, than acquiring new customers. So why in 2023 so many companies still focus mainly on acquisition and neglect marketing that helps to retain customers?

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What marketing opportunities by focusing its strategy on customer retention?

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Optimise the management of your marketing budget

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By focusing on a strategy that aims to increase customer loyalty, you can make your marketing budget profitable and waste less time looking for potential prospects that are suitable or not for your business. The solution that has proven itself is to stay in regular contact with its customers. For most companies, maintaining personal contact with each customer is not realistic.

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This is where digital marketing comes in. By simply staying connected through content marketing, emailing and social media, you can be successful in a variety of ways:

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• Stay in touch with your current customer base
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• Remind customers of upcoming events and seasonal tips
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• Maintain a professional appearance through all communications
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• Take advantage of opportunities to connect with customers you haven’t spoken to in years.

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The acquisition is more expensive
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Statistics vary from industry to industry, but research indicates that customer acquisition is a much more expensive business than loyalty. In fact, acquiring a new customer can cost five times more than retaining an existing customer.

Why such a difference? When it comes to new customers, don’t forget that you’re practically starting from scratch. They probably have no prior experience with your brand and may not even trust your business. It takes time and money to get them interested in your product, and even more time and money to convince them to buy from you.

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With existing customers, you don’t have to fight so many obstacles to the transaction.
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Loyalty offers a better return on investment
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In many cases, the upfront costs of acquiring a client mean that many business-client relationships are not profitable at first. It is only after several months or even several, thanks to solid loyalty processes, that these relationships generate significant returns.

Let’s take GrooveHQ as an example. When they increased customer retention by 5%, it led to a 95% increase in their profits. Growth without loyalty is not solid growth, loyalty is the most important strategy for growth.

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A customer gains value over time and a solid loyalty strategy will keep your current customers longer.
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Happier customers favor word of mouth

Word of mouth marketing is one of the most effective forms of advertising. For example, a study found that 92% of consumers around the world trust the recommendation of a friend, family member or acquaintance rather than any form of business advertising.

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When you retain your current customers with exceptional service and high-quality results, they are more likely to be satisfied with the relationship; and when they are satisfied with the relationship, they are more likely to recommend your business to others. Your loyalty fuels your acquisition – and you don’t have to pay a penny for that positive advertising.
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Get around tracking pitfalls more easily
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We know that the conversion cycle of a prospect into a customer is sometimes difficult to follow.

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It is not uncommon for some acquisition tools to not (or not) allow us to source the origin of a conversion. This pitfall was observed in particular with the update of iOS and this has a direct impact on statistics.

Instead of spending money unnecessarily on information that you may never be able to track or quantify, focus on the existing.

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How do I know if I should prioritize an acquisition strategy or a customer retention strategy?
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If your budget is very limited, focus on loyalty
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As mentioned earlier, customer loyalty leads to better ROI from marketing spend. If the acquisition is important for long-term growth, the upfront costs associated with getting new customers can be too high for your business if you have a tight budget.

On the contrary, customer loyalty allows you to optimize its LTV (Lifetime Value) and thus optimize the management of your budgets and revenues.
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Ideally, ensure a balance between acquisition strategy and retention strategy
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All things being equal, any business should focus on both acquisition and retention. In the end, it’s both sides of the same coin: to succeed in growing your business, you need to acquire a steady stream of new customers without losing existing ones.
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If you develop a realistic marketing strategy that incorporates both customer acquisition and loyalty initiatives and then implement that strategy with the resources you have, you will have every chance of enjoying steady and sustainable growth for years to come

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Do you want to be supported in your retention strategy? Spaag will advise you on your B2B or B2C online growth by ensuring your profitability. Let’s discuss your ambitions.

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