Like most marketers, you may focus mostly on winning new customers and less on retaining existing ones. But is that right? Prevent getting tunnel vision for acquisition and discover why retention also deserves your attention in 2021. 


Should you choose for acquisition or retention? Ask marketers this question and you will face two different camps. Similarly with branding and performance marketing, or ‘data-driven’ and ‘gut feeling’. But as always it is not an OR story at all, but an AND story. A successful company works on winning customers and retaining customers.


Acquisition and retention


By acquisition, we mean the winning of new customers. Think of an online example of a sports retailer who purchases campaigns on Google on general keywords, like sneakers or running watches. By retention we mean the increase of the ‘customer lifetime value’; retaining existing customers for longer, stimulating repeat purchases, and having them spend more with you. Think of email campaigns for onboarding, repurchase, up-and cross-sell. Excellent customer service is naturally part of it, but in this article, we focus on online efforts to increase your customer loyalty.


Why do we mostly focus on acquisition?


We have to meet the party which incorporates as much acquisition as loyalty metrics in their KPI framework. Why are the sights almost automatically on acquisition?


  • We do what we are used to. As performance marketers we have mostly been looking at acquisition metrics, like clicks, leads, conversion. And that goes well. Why change a winning team?


  • We see results quickly. After having a campaign go live we are immediately awarded with the insight in the amount of visitors and we see orders and leads coming in (if all goes well). Loyalty is more of a long term story.


  • We can measure it well. As performance marketers we love all that is measurable. Acquisition is easily measured, but with loyalty the ROI is harder to identify. Acquisition is easily mapped with pretty out-of-the-box reports of channels like Google and Facebook. But to map retention you have to make more effort: you have to connect your own data from multiple sources and get to work. That requires more knowledge and skill.


  • We mostly look at costs. As marketers we make the most impact by saving on high cost resources. Those are almost always acquisition channels, like Google Ads and Facebook Ads. So we quickly start tinkering on using the budget for that more efficiently. But if you were to focus on ROI, loyalty efforts more often have a higher yield.


Now should you only focus on retention? No. Our advice is not to choose one or the other. It is smart to give attention to both goals.


5 reasons to focus more on retention


  1. The competition rises (and so do your advertising costs). The landscape of online marketing is becoming saturated with more and more providers. That competition has an influence on the CPC and CPM prices of your adverts. Among others the timing, place and target audience of your advertisements are of a greater influence on the costs.

  2. The loyalty declines (and so does your influence). Consumers have more power than ever. They can get whatever they want, whenever they want, and from whoever they want. That leads to less brand loyal customers, who change brands without hesitation. A coupon of your competitor can easily break apart a 5-year long customer relationship.

  3. Your customers expect a personal approach. Gone are the days of ‘batch and blast’ emails. Send impersonal and generic emails today and you will lose customers. The transparency in today’s marketing magnifies this even more.

  4. Technology helps now. In the past, as a marketer, you had a tendency to measure loyalty like a historical KPI. With machine learning, you can already prevent customers from leaving, even before they actually do. Moreover, with the rise of Customer Data Platforms (CDPs) it is easier than ever to really get to know your customer and thus to better respond to their needs.

  5. Cookies disappear (so you know less about your customers). Channels like Google and Facebook are transformed into ‘walled gardens’, they no longer share their data outside of their own platforms. This makes collecting first party data even more important. If you start collecting first-party data now, you’ll have a great advantage later. Maybe the disappearance of cookies is not such a big deal after all. It forces you to no longer depend on the giants, but to also find out more about your customers yourself.


Loyalty pays off


If you are not yet convinced to invest more in existing customers in 2021, the euro’s will. Loyalty pays off.


  • It is cheaper. Investing in existing customers is cheaper than investing in new customers. You already know your customers, so you can reach them with cost effective channels like email and telephone and i.a. Google and Facebook with limited remarketing budgets.
    On top of that retention is not ‘pay-to-play’, as opposed to acquisition. An average retail customer at BossData spends about €100.000,- a month. Usually you can create more returns with €100.000,- loyalty efforts.


  • The margins are higher. Not only do you reach existing customers more cheaply, but their average spending with you increases: according to Bigcommerce the top 10% of your customers spend about 3 times more than your other customers.



  • The threshold is low. Are you taking your first steps in retention? Then you can still grow a lot compared to an acquisition channel that you have been optimizing for years. Pick low-hanging fruit for direct results!


  • Your investment is sustainable. As with SEO or CRO, your retention efforts are ‘evergreen’. You invest one time only in flows that continue to pay off and require minimal maintenance.


Acquisition and retention 


So it is not acquisition or retention, but acquisition and retention. Put effort in both and they will strengthen each other like a flywheel: satisfied customers pass it on and bring new customers. So make sure to work on retention in 2021. Immerse yourself into your customer and look at the entire customer experience to decide which improvements lead to the greatest results. For example, it is possible that you do not necessarily need a new email campaign, but maybe you can tinker on your customer service process. Where are the frustrations, how can you help your existing customers better? That is how you work on customer retention and keeping your business profitable.



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