Being in business as a brand or company often means that you have to spend money on advertising and promotional campaigns. It’s done not only to gain customers, but to keep customers – and this difference is referred to as the gap between customer acquisition and customer retention.
Acquisition costs are what you spent to get your customers, and retention costs describe the funds going into the business to keep them. Your promotional budget requires these two to be in balance for a good return on your investment.
Acquisition and Retention: A Fine Balance
A successful business finds a balance between acquisition and retention costs.
New businesses might want to spend more on acquisition, but eventually this should move towards a balance: Would you rather keep acquiring new customers or focus on repeating the business you already have?
When to Spend on Retention
It’s a lot cheaper to keep the same customers than to get new ones. It’s important for your brand reputation as well, so look to ways to reward your existing customers for being loyal, whether it’s a frequent customer discount or updating your product line based on customer feedback.
Contact My Trending Now to learn more ways that you can keep customers coming back to your business.