Striking the Balance Between Customer Acquisition and Retention

Published: | By Nahla Davies

The traditional marketing methods of most online retailers have become disrupted. Retailers now have to recalibrate in order to meet new demands and strike the right balance between customer retention and acquisition. 

This means businesses must navigate a hypercompetitive online market by tailoring their efforts to both maintain existing customer relationships and convert leads into new customers. Let’s explore what this balance looks like and some tools to find it for your business.


Acquisition-Oriented Approach

Customer acquisition refers to a systematic approach to acquire new customers. The first phase is to generate interest for your offering through different marketing techniques like paid advertising, social media, and cold calling. In the second phase, you take steps to convert quality leads and valuable prospects into actual paying customers. 

The most significant benefit of an acquisition-oriented approach is that you can perform it on a massive scale with relatively little investment. Because of the latest advancements in digital marketing technology, particularly marketing automation tools, businesses can efficiently map out and segment leads and go multi-channel with their advertising approaches.

By leveraging customer data and analytics, your organization can discover potential selling opportunities and advertise accordingly. This is particularly true when you are introducing a new kind of service or product. If you have done thorough customer research, you can spread the word on your digital platforms about your latest offering and gain new prospects.


One of the drawbacks of implementing customer acquisition strategies is that consumer interests are always changing, so it requires you to keep up. Automation and analytics are critical in providing tailored offerings to maximize lead conversion and acquire new customers. You must understand the needs of your target customer base in order to provide them with products that interest them and gain yourself new clients. 

One strategy is to use current customer insights to gain new ones. Asking existing customers for feedback will help you better understand who likes your products and why. This will in turn help your marketing team understand who to target in the future with similar offerings. 

Retention-Oriented Approach

A retention-focused approach is all about keeping your current customers interested in your products and connected with your brand. The idea is to keep your customer base engaged, which will increase the chances of repeat purchases. 

One way you can achieve this is through your customer service, particularly in the event of a complaint or question. Your support team should be knowledgeable and friendly, and if you use chatbots, responses should be as informative and “personal” as possible. 

For existing customers, the checkout and payment process is also critical for providing a user-friendly experience. Harness automation to provide high-quality invoices to your customers and deliver a seamless and transparent payment experience. Make sure to use software that comes with crucial features such as cross-platform invoice templates and automatic reminders. 

There are also several strategies to win back customers at multiple stages of the process, including rewarding loyal customers who have been with you a long time and providing a smooth onboarding experience for newer recruits. 


You may have heard it said that customer acquisition can cost five times more than retaining current customers. While it’s true that personalization can increase consumer spending, this can be applied to both acquisition and retention. You should not simply focus on one or the other, but rather incorporate automation and personalization into all aspects of your customer interactions and lead generation. 

A Balanced Approach

Today, you can efficiently pursue customer retention and acquisition simultaneously with the emergence of various tech solutions. You can leverage the power of social media, analytics, and automated marketing to attract prospects and leads. Then, you can hand them over to your customer support teams for long-term lead nurturing to make sure one-time purchases turn into brand loyalists.

Also, pay attention to what users are looking at in your e-commerce shops. You can track your customer experience data and use the information to modify your customer relationship strategy. This can help you understand what aspects of your services, website, etc. are effective and which need to be reworked. 

Your overall marketing efforts determine how effective you are in both acquiring and retaining customers. There is no one-size-fits-all approach, but there are many ways you can make a positive impression over time, such as:

Tailor Your Messaging

Generate content that addresses your customers' concerns and solves specific problems. The personalized messaging will be more appealing to existing customers and make them feel known. Send tailored messages to your existing customers for effective marketing and results. Tailored messaging is ultimately what helps you to build a long-lasting and meaningful customer relationship.


Don’t Discount the Use of Email to Reach Customers

Even in the social media age, email is still a tried and true marketing method. For example, you can offer customers special discounts via email to get them to make additional purchases, send updates, or even to send them personalized messages (such as wishing them happy birthday) to help them feel valued. 

Besides writing high quality emails that resonate with your customers, you need to make sure your messages are actually getting delivered. According to Toronto-based online marketer and software developer Gary Stevens of Hosting Canada, the email host you choose will have the biggest impact on keeping deliverability issues to a minimum. 

“Do yourself a favor and make sure that whatever host you choose offers Imap and Pop3 email delivery,” says Stevens. “For many small businesses, email deliverability is a matter of survival. Once you’ve signed up for an email host and secured your company email, integrate it with a dedicated email marketing service, so your messages reach their intended destination without a hitch.”

Maintain Engagement with Consistent Communication

Keep customers informed about upcoming products, features, and events via live chat and email. Make sure to segment your contacts so you are targeting different customer demographics. 

Make your current customer base feel heard and valued with regular communication. Motivate them to be brand advocates by providing their feedback in reviews and surveys. Dive into your data to find out which of your current customers are worth holding onto and which are unlikely to buy.


The right ratio of retention to acquisition varies for each retailer. Still, it’s clear that striking the right balance between both strategies should be your end goal in order to maximize your marketing effectiveness. 

When you combine your acquisition and retention efforts, it better resonates with your customers and helps extend your relationships with them beyond single transactions to make them feel valued. Rewarding and recognizing your top customers, knowing the needs of your target base, and providing strong customer support at all stages will help turn prospects into clients and turn customers into brand advocates. 

 If you are just getting started, download our free eBook to help you get more new customers.

Screen Shot 2021-05-26 at 2.11.14 PM



About the Author: Nahla Davies is from Brooklyn, New York. Since 2015, she has worked with enterprise clients around the world developing RegTech protocols and best practices. She shares her insights at Follow Nahla on LinkedIn.


Share this Article: