|Image courtesy of Quadient|
It seems there ought to be a balance, or a shift in balance, no?
The old debate stands: should companies focus on customer acquisition over retention? Despite the fact that the cost of bringing in new customers is much higher than the cost to keep existing customers, companies place a disproportionate focus on marketing and advertising in order to attract new customers. In doing so, they create what’s called “the leaky bucket syndrome,” i.e., as fast as companies are bringing new customers in the front door, existing customers are running out the back door. Should companies plug the leak or keep filling the bucket?
The debate about where brands should focus their energies and currencies is strong. Despite the statistic that acquiring new customers costs 5-25 times as much as retaining existing ones, marketers (and, generally, their CEOs, as well) believe that resources should be spent on acquiring new customers. Why? Well, I wrote a whitepaper for Quadient recently to more deeply explore this conundrum. I'd be honored if you would download the whitepaper, read it, and give me your thoughts.
Here's my bottom line on this dilemma: Both acquisition and retention will always be important. Companies need to work on both. Without acquiring new customers, there will be no customers to retain. Without retaining existing customers, companies will suffer through the leaky bucket syndrome, and acquisition costs will be outrageous. So there needs to be a better balance between both, along with a strategy for how to do just that.
Make a customer, not a sale. -Katherine Barchetti