When you’re running digital marketing campaigns, it’s easy to get caught in the acquisition vs. retention debate. Do you pour your budget into attracting shiny new customers, or do you double down on keeping your existing ones happy?
The short answer: both matter!
But here’s the twist, retention often gives you a better bang for your buck than you might think.
Let’s unpack why that’s the case, how retention strategies can supercharge your ROI, and when acquisition efforts still deserve the spotlight.
Why Retention Packs a Punch
Acquiring new customers is expensive. CAC has been steadily climbing across most industries. Whether you’re running ads on Meta, TikTok, or Google, costs can escalate quickly, especially if you’re competing in saturated markets.
Retention, on the other hand, costs less and often brings in more revenue. Here’s why:
Repeat customers spend more. Data shows repeat customers are 50% more likely to try new products and spend 31% more per transaction.
They tell their friends. Word of mouth and referrals from happy customers are marketing gold, especially in an era when people trust reviews more than ads.
Retention fuels long-term growth. High retention rates drive higher Customer Lifetime Value (CLV), meaning you make more money per customer over time.
If you’re focused on improving ROI, retention is where it’s at. After all, why chase a new customer for $50 when a returning customer is spending $200?
When Acquisition Deserves the Spotlight
That said, you can’t exactly run a business with zero acquisition. Even the most loyal customers churn eventually, and industries with low purchase frequency (like real estate or weddings) naturally require a focus on acquisition.
But acquisition is more than just finding any new customers, it’s about finding the right ones.
Here’s how you do exactly that:
Prioritise high-value customers: Not all customers are created equal. Use lookalike audiences, predictive analytics, and CRM data to focus on those most likely to stick around.
Test new channels: While TikTok may offer a lower CAC for impulse purchases, platforms like LinkedIn might be better suited for higher AOV services or B2B campaigns.
Leverage acquisition: The first purchase sets the tone for the customer experience.
Smooth onboarding, thoughtful follow-ups, and education about your product go a long way in turning a first-time buyer into a lifelong fan.
Balancing Acquisition and Retention
The best marketers know it’s not an either-or question. It’s about weaving acquisition and retention into a cohesive strategy.
Think of them as two sides of the same coin: acquisition brings them in, and retention keeps them coming back.
Here’s how you can strike the right balance:
Segment your budget. Allocate 60–70% of your budget to retention-focused efforts (email flows, loyalty programs, and community engagement) and 30–40% to acquisition campaigns.
Track your ratios. Metrics like the CLV-to-CAC ratio can reveal whether you’re spending too much to acquire customers without enough payoff over time.
Use retargeting wisely. Retargeting is where acquisition and retention overlap. It’s the bridge between “I’ve never heard of you” and “This is my favourite brand.”
Retention Strategies That Actually Work
Not sure where to begin with retention? Here are some tried-and-true approaches to get you started:
Follow up after the sale: A solid post-purchase email flow can keep customers engaged. Share helpful product tips, suggest items they might like, or offer loyalty perks to keep them coming back.
Reward your VIPs: Treat your best customers to exclusive discounts or early access to new products.
Consider subscriptions: If your product or service works on a recurring basis, subscriptions can be a game-changer. They secure consistent revenue and help customers integrate your brand into their routine.
The Surprising Truth
Here’s the surprising bit: focusing on retention doesn’t just help keep customers, it actually helps with acquisition, too. Loyal customers are walking, talking billboards for your brand. Their reviews, social shares, and glowing recommendations do what no ad campaign can: build trust.
So, while the acquisition vs. retention debate may never go away, the answer is clear. Retention has a multiplier effect that’s hard to ignore. But don’t completely sleep on acquisition, it’s the fuel that starts the fire.
What’s your strategy? Are you leaning more toward acquisition or retention right now?
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.
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