Which is more effective, customer acquisition vs. customer retention? Only 18% of companies focus on the latter, while 40% focus on the former.
Yet, acquisition costs 5 times as much as retention. This is because marketing eats up a bulk of the budget, and not all people who are targeted by ads become customers. On the other hand, retention programs designed to keep existing customers happy often result in repeat purchases, along with word-of-mouth advertising that attracts new customers.
The numbers speak for themselves. Existing customers are 50% likelier to check out the new products and services of a brand they trust. They also spend 31% more money than new customers. This means that when customer retention increases by just 5%, businesses can increase profits by anywhere from 25% to 95%.
It’s more affordable to retain existing customers, and more profitable. So make sure loyalty pays for your current client base.
This infographic focuses in on customer acquisition vs. customer retention, courtesy of Invesp Consulting.
Infographic by- Invesp