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Five Reasons Why Customer Retention is Better Than Acquisition

Jacob Brain


Customer retention is the largest “missed mark” in marketing for most compainies. The recent surge in loyalty programs shows the desire for companies to invest in thier customer base in a meaningful way, yet many companies just don’t grasp the larger focus on customer retention and the power of the relationship. Below we list five reasons why customer retention is a substantially more impactful way of spending your advertising dollars than traditional media-based acquisition.

First let us narrow the scope to understand what we are talking about when we say retention and acquisition. For our points here, we are speaking to two larger sides of a coin. Customers we do know and who have purchased before, and customers we don’t know, with no purchase history. These are two generalized buckets, which can and should be broken down for analysis, but for this post, we’ll generalize.

The cost of next purchase is radically less than first purchase.

If the customer has a purchase history, then the cost of outreach you’ll need to expend to invoke another purchase should be considerably less that the first time acquisition cost. The customer has experienced the purchase process, you delivered on value, and they are using the product. Most all the barriers to purchase have been crossed, so less capital is needed to influence next purchase.

You know your current customer better.

If you are maximizing your customer outreach and preference building, it should be a much narrower target, and thus more cost efficient and relevant to market to your current customers. Messages should be crafted based on current knowledge and successes.

A sales force multiplier lives in your advocates.

Your customer base is a growing source of reviews and referrals for your company that you can use to build sales. You have a unique relationship to help grow and groom your customers into advocates that can push your brand and products towards new customers and revenues. Not continuing the conversation with your customers after checkout is a missed opportunity.

Those who control the past, control the future.

Having detailed and smart statistics on your current customer base is going to greatly inform your decisions in acquisition marketing. Knowing your best customers helps you understand what customers you want to attract next.

Acquisition focuses on the short-term sale, retention on the long-term relationship.

Acquisition is about getting sales through advertising. Retention fosters a deeper, more profitable relationship with your customer over long-term relationship marketing.  Without a plan for relationship building through retention, you will have to constantly increase your sales effort to replace one-time sales, chasing volume of customers rather than quality of customer. With retention, you can focus efforts on repeat sales, referrals, and building customer value in a more positive way for your bottom-line.


These five points are food for thought as you plan and think about how retention fits into your marketing plan. Having a detailed marketing plan for retention can greatly influence how you do acquisition and create a better marketing plan.

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