What is More Important: Customer Acquisition or Retention?

Managing your customer base as an eCommerce business comes with a lot of challenges. Ensuring a steady flow of new customers and maintaining loyal customers is a delicate balance of marketing priorities. Not to mention the battle of reducing lapsed customers as well.

With only 18% of businesses making retention a priority, it’s no surprise so much time and money is spent on acquisition.

Most businesses aim to grow as much as possible. To do so, requires more and more customers coming through your door.

But, the probability of selling to an already existing customer is 60% higher than selling to a new customer. 

Churning and burning through customers does more harm than good. It would be more of an indication that you’re not functioning properly as a business. Establishing and retaining loyal customers not only builds more trust in your company but stability too.

It’s a tough situation to navigate and it’s difficult to know which basket to put your eggs in. Or more of them at least.

Customer Acquisition

Customer acquisition is imperative for businesses to get a foothold in whatever market they are entering. Without new customers, it’s impossible for a business to survive.

Customer acquisition is also a way of understanding the value of your customers. This comes down to how much you spend on getting that customer, and how much they spend on your product or service.

Acquiring customers seems like a pretty straightforward task but it does take a specific skill set to do it well. 

What you don’t want to do is spend high and get low value customers in return. This won’t help you in the long run when it comes to retention. As a matter of fact, customer acquisition costs (CAC) have risen by 50% over the last few years.

In a lot of cases, businesses don’t have a defined acquisition strategy. In order to make it work, you need to know where to put your efforts.

Building a Successful Customer Acquisition Campaign

A successful acquisition strategy will win you new business. An increase in customers will lead to an increase in revenue and brand awareness.

The first step in putting together a successful strategy is to understand your ideal customer profile. Not every single person is going to be a customer. By identifying what type of person matches your customer personas, you can concentrate on them. You will waste time and resources otherwise.

This can be done by taking a look at your current customer base, or taking a look at competitors and other operators in the industry. Figure out who your ideal customer is and work from there.

Following this, you need to understand what you want your customer to do when you get them. Generally, most businesses would want their newly acquired customers to complete a purchase. But might also want them to sign up for a newsletter or create an account instead.

The main thing here is that you make sure they complete some sort of action.

You will also need to identify where you can find your potential new customers. This is where your choice and use of channels is very important.

It’s important that you approach this tactically. Competitor analysis and keyword research play integral roles here to ensure your strategy actually works. You also need to fully optimise your site or else you’ll struggle to get people on board with your business.

The powerhouse that is Google can be used in multiple ways to get your brand in front of new eyes. Paid media, technical SEO, and content marketing are all very good places to start. Producing content and carrying out SEO practices isn’t expensive and are pretty consistent in their costs. Paid media, on the other hand, can be a bit of a rollercoaster when it comes to costs.

One thing you must keep in mind is that this will be many people’s first time interacting with your business. So you have to make sure that the experience is a great one from the start. If it’s not, then they probably won’t bother with you.

Some Strategies

Of course, different customers are interested in different things. Some people don’t pay attention to ads they see on the internet.

Not everyone will see or respond to every campaign. So trying different approaches on different channels will give you the best chance of success.

Split testing and analysing campaign performance will give you the insights into what’s working best for you. It will also help you decide on where to put your efforts for the future.

If you’re not sure where to start, below are some examples to help get you off the ground.

Paid ads

One sure way of getting your business in front of a new set of eyes is to pay for it to happen. When it comes to Google, people take notice of what is appearing first on the page. If you get your paid search strategy right, this is where your paid ads will be placed. For users who are ready to pay for a certain product or service, paid ads on Google get 65% of the clicks. Although it will be expensive to place that high, the results do come through.

But paid advertising doesn’t only come in the form of Google ads.

Using social media for paid advertising is an incredibly beneficial direction to go down. The average daily usage of social media is almost two and a half hours. That is plenty of time to get your brand in front of some new faces.

You can build your campaigns on social media sites by demographics, geography, and interests. So your ad campaigns on social media can be quite targeted and effective.

Content

Creating new and interesting content to get out in front of people is a great way to catch their attention. And lucky for you, content can come in plenty of different forms.

Initially, blogs and videos come to mind straight away. And they work well too. But you can get more creative with the content you put out.

Webinars and podcasts have proven to work well. However, the rise of social media has seen businesses lean into this side of things and it’s been highly effective.

In a world where false advertising is seen relatively frequently, customers struggle to trust businesses as being honest. But companies have combatted this by showing a more human, even sometimes self deprecating side to their brand. This is something Ryanair have done so well with their social media and has made them a big name on TikTok and Instagram.

There’s no reason why this can’t be adopted by businesses in other industries.

The inclusion of user generated content also shows the trust and passion that users have in your brand. This can be a great way of interesting new customers.

However content can be a slow burn in the beginning. It can take up to 6 months for your content to gain any sort of traction with Google. So it’s important to create it in conjunction with other activities.

SEO

Search engine optimisation optimises your website. Every page on your site from your homepage to your blogs need to be optimised for search. 

That is to say, you need to make sure that, in addition to content being relevant, you’re hitting relevant keywords too. 

Implementing an SEO strategy to your acquisition attempts will help you massively.

SEO isn’t an exact science and can be difficult to get right. Tools like SEMRush and MOZ can give you the insight you need to make inroads faster. 

As with content, your SEO efforts can take time so make sure you’re supporting this work with paid search.

Getting onto the first page of Google is obviously the goal as 75% of users don’t go past the first page. Your content marketing efforts are what will give you the most chances of success. The more relevant, optimised content you put out, the greater your chances of ranking on page one.

A few SEO best practices include:

• Aligning your content with the search intent
• Writing accurate title tags and meta descriptions
• Using and optimising images
• Choosing the right keywords
• Making the content useful for the reader

Customer Retention

Establishing and maintaining a loyal customer base is an incredibly important aspect of any business, but especially when it comes to the eCommerce industry. There is always a struggle in reducing lapsed customers.

Overall, it costs a lot less to retain a customer than to acquire a new one, and repeat customers spend at least 33% more per purchase.

Customer retention becomes such an important thing in eCommerce because customers are spoiled for choice. If you don’t provide the service they want, they’ll find it somewhere else.

Building Successful Customer Retention Campaigns

Customers expect a lot more from businesses in today’s market. They take much more notice of poor communication and it does have an effect on their buying decisions further down the line.

Keeping your customer churn rate low can boost your profits significantly. A low rate also indicates that you are certainly doing something right and that your customers appreciate the service you provide.

But getting to that stage of retention takes time and effort.

Some Strategies

Your retention strategy should revolve around demonstrating and communicating your value over your competitors. 

A well run strategy will also begin to have a positive impact on your profits. Loyal customers spend more money per purchase, more often. They are also more willing to try out new products that you offer.

This all comes from great service you provide. Good service builds trust making it less likely they will look to anyone else. 

That is unless you begin to fall short of the mark.

Here are some good ways to ensure that the relationship you have with your customer remains strong.

Your Service Offering

The service that you offer and operate is an essential aspect of your business and helps in reducing lapsed customers.

Although customers do tend to be loyal to certain businesses, 89% of them will move on after one bad online experience. This speaks to the importance of providing a seamless experience every single time.

The thing is, lots of companies don’t do this well enough at all. 80% of companies worldwide believe that they provide a top quality online experience for their customers. But only 8% of customers agree with this statement.

A quality service offering includes things like:

• A site that is easy to navigate
• High speed loading pages
• A seamless checkout process
• Quick and reliable delivery
• Reliable stock levels
• Consistent communication
• Good customer support

The Customer Experience 

Customer expectations have never been higher. They want more than low prices and fast delivery. The more value you can add to the shopping experience, the more likely they are to shop with you again

Every email you send, notification the customer pushes, or offer they are given should be personalised. The days of batch and blast communications are long gone.

Good quality communication and a positive online user experience begins with understanding your customer. The best way to go about this is to leverage the information and data you have at your disposal.

Using your data to identify what a particular customer likes or values leads to a good experience and a higher rate of customer retention.

As well as this, the channel by which you communicate with users is an incredibly important aspect of providing a quality online experience for the customer.

Both acquisition and retention are equally important to your success..

However customer retention can bear more fruit in the long run. Increasing your tribe of loyal customers will increase profit. They aid in your business surviving. 

Establishing strong performing campaigns in either respect can be difficult. But it is absolutely far from impossible. Marketing automation tools are incredibly effective in bringing in results.

Get in touch today to learn more about how Xtremepush can help you acquire, engage, and retain your customers.