We all want to build up a bigger following of customers. But when it comes to knowing how to get more interest in and support for your ecommerce brand, what's the best strategy – retention or acquisition?
What's Meant By Customer Retention?
Customer retention is the fine art of keeping people around! Once a customer is won through their initial conversion, retention is the strategy whereby you keep them engaged and connected - continuing to make future purchases from your brand.
This can be achieved in a number of ways, including:
Loyalty programmes
Customer email campaigns
Personalised and valuable discounting and coupons as gifts
For more top tips on how to ethically engage your customers, check out our article: Creating Better Customer Connections: Better For the Planet & Your Bottom Line.
What are the main benefits of customer retention?
Loyal customers spend 67% more than new ones.
The chance of selling to an existing customer are 60-70%, while the chance of selling to a new customer is only 5% to 20%.
It's 7 times cheaper to retain a customer than it is to go out and actively acquire one.
Increasing customer retention by just 5% boosts profits by 25% to 95%.
(Source)
What's Meant By Customer Acquisition?
When we talk about customer acquisition, we're looking at bringing new fans to the fold. Going out and proactively winning new custom is an essential part of getting first-time sales across the line! Whilst this can feel a little more intimidating than communicating with customers who you already know enjoy your brand, every retailer needs an acquisition strategy.
Brands acquire new customers via many methods, including:
Brand building over social media
Leveraging social proof in
Paid advertising
What are the main benefits of customer acquisition?
Essential to expand and grow your business
Helps to balance out your marketing budget
As a mindful brand, you're reaching more people with your message or mission!
What's Best – Customer Retention Or Acquisition?
Retention and acquisition are two halves of the same coin – you can't really look at each in total isolation.
That said, you only have so many resources to dedicate to your customer strategy, so you'll want to take an objective look at the way in which you decide to target your focus.
Ultimately, the answer to the "customer retention or acquisition?" question will be governed by the stage of growth that your business finds itself at. If you're still young and scrappy, it's most likely time to be investing hard in your acquisition – growing those lists and leads, getting the word out there.
If you're more established, with a decent number of first-time buyers to fall back on, invest in keeping them around, maximising your chances of bigger cart values, loyalty and increased conversion rate.
Finding Balance as a Mindful Brand
Whatever blend of retention and acquisition you settle upon, as a mindful retailer, of course, you'll want to be marketing to and treating your customers in the most ethical way possible.
Whether your retaining or acquiring customers, this can be done through the lens of honest, transparent messaging - which doesn't rely on high pressure selling (such as flash sales) which encourage overconsumption and scarcity - meaning more stuff being returned or ending up in landfill.
Sustainable retailers have a unique story to tell when it comes to the way they reach out to customers; new and old. Learn more about the tech that can help you to build deeper relationships with conscious consumers here.
The concept of shopping with a brand that cares about minimising its impact and leaving a positive mark on the world is just as effective at appealing to first-time customers as it is to give loyal shoppers a great reason to keep returning.
A combination of both acquisition and retention is a strong strategy. But, depending on where you are at in your business, you'll need to choose which strategy to focus the majority of your time on.
Look to bounce ideas off other ecommerce merchants who share your values?
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