To dear community
One of the important marketing tasks is to increase the CLTV by increasing retention. I agree with this practice. However, it isn't easy to retain the customers, especially in the B to C business. So do the organization's marketing still need to focus more on retaining the customers, or should they spend more time and cost on acquiring new customers?
Looking forward to having an energetic discussion.
Whether a company should emphasize customer acquisition or customer retention is a misleading question: both strategies are important for growth and sustainability, respectively. Notwithstanding, the arguments in favor of retention are that acquisition is expensive (and so more important where budgets are constrained); retention has a higher return on investment; and satisfied customers are more likely to spread the word. In contrast, the main argument in favor of acquisition is that the results of campaigns are more quickly evident. To note, some companies (e.g., software as a service) have a natural focus on retention. Preferably, one should prioritize acquisition and retention equally.
Personally, I would say both are equally important, but this depends on the objectives of the company, as implied by Olivier Serrat
It is significant for companies to employ customer retention strategies in order to retain talented manpower
Olivier Serrat Thanks a lot for your insightful response. Retention is very challenging in this present time. Many new brands are coming and hitting the share of the established brands through their well-thought social commerce channels. How are these established brands sustained without much focus on acquisition?
Rodney Duffett Thanks for your response. Can the brand sustain itself by retaining 20 to 30 percent of customers? Can we say that the retention and acquisition strategy varies with product or sector? Looking forward to some more insights
Rohit Bansal Thanks for your response. Which one is relatively better? Can this varies with countries' status, whether developed or developing? Looking forward to having your thoughts on the same.
Bhuvanesh Kumar Sharma, upcoming companies can indeed eat into the market share of established brands (when they do not actually create an entirely market by themselves). In such cases, mergers and acquisitions do provide a way for established brands to increase market share (and also, say, diversify, generate economies of scale, reduce financial risk, and access R&D expertise). (Facebook acquired 78 companies between 2005 and 2019.)
This response is from a user's perspective.
When I was a nurse practitioner (bladder and bowel health), we worked quite closely with the commercial sector and tried to keep abreast of the relevant products available and would try new products. We would then pass the information we had gleaned on to district nurses and sometimes carers, if we were satisfied with what we had tried.
It seemed that the representatives from the companies that we used put a lot of effort into keeping us informed of new products and visited us in the workplace, to make sure that we had no problems or complaints.
We usually tended to become new customers only after conferences and visiting stands that we were unfamiliar with.
We did appreciate the continued attention from the companies that we used and felt that we were working with them in a way that benefited both them and us.
If a company started interacting with us, but then did not continue to support us, unless their products were very indispensable or particularly good, with no similar alternative, we would tend to stop using what they manufactured.
My answer will be yes. Retention is cheaper than new customer acquisition, but the later is desirable as well to assure market growth and sustainability.
- Badges
- Science topic
- Similar topics
- Social Science
- Media
- Journalism