Retention or Acquisition? Is one more important than the other? 
One of the most fundamental issues to any company is whether to place more focus, time and investment on customer acquisition or customer retention. While both are important to making your business a success, businesses often focus on acquiring new customers, and lose focus on
retaining the ones they already have. In the print media industry for example, retention and acquisition were two of the main KPI’s that were tracked on an ongoing basis. Early on, we learned the golden rule that for every customer you lose, it takes two new customers to grow your base and it’s easier to find one new customer, than
to lose a current customer, and have to find two new ones to get ahead. Makes sense in any business. Plus, when retention is high, and churn is low, it’s a sign that you are in sync with your customers' needs and wants.
When you’ve mastered this, then acquisition can be measured as true growth.
retaining the ones they already have. In the print media industry for example, retention and acquisition were two of the main KPI’s that were tracked on an ongoing basis. Early on, we learned the golden rule that for every customer you lose, it takes two new customers to grow your base and it’s easier to find one new customer, than
to lose a current customer, and have to find two new ones to get ahead. Makes sense in any business. Plus, when retention is high, and churn is low, it’s a sign that you are in sync with your customers' needs and wants.
When you’ve mastered this, then acquisition can be measured as true growth.
Yes, acquisition equals new revenue, however if you are simply replacing revenue lost from not retaining your current customer base, then eventually this short term solution will result in increased expenses and flat revenue growth. So, in my pursuit for companies with killer (meaning great) service, here are a few suggestions on how to improve customer retention:
1. Relationship building – Big or Small, it’s a must. The customer is keeping you in business so you better build more than an A/R list with them. Big business should take their lead from small businesses in this category. Small businesses can be great at building lasting relationships with their current customer base!
2. Monitor your call centre - Are your customers calls answered by a call center? If so, MONITOR IT REGULARLY. Call in frequently and ensure they are treating your customers the way you would treat them. Address issues on a regular basis.
3. Set up a customer culture for your business. Maybe it’s a few key words that should be top of mind with every employee when dealing with customers. Service, Smile, Satisfaction = Sales for example.
4. Keep your website current and relevant. Often customers will visit your website to search for an answer to their question before calling or visiting you. Do you have a FAQ section? Is it updated regularly with actual FAQ’s?
Customer service can make or break you when it comes to retention. Don’t let something this easy stand in the way of profit! Remember, happy customers tell others about their great experiences, dissatisfied customers will leave.
Wishing you Acquisitions on top of Retention!
Barb Bruce service@myradius.ca
