Traditionally, customer acquisition was the name of the game. Companies thought that once they “had” a customer, they didn’t need to do anything else—the customer was theirs.
Back then, that had been true. People had few options and very little information. But in the digital age, things are a lot different. The definition of customer acquisition has changed. Today, customer acquisition strategies would also include customer retention and customer loyalty programs. These efforts are aside from creating unique selling points that are more customer-centric.
But, why is shifting focus from customer acquisition towards retention and loyalty so important in today’s market?
The reasons are due to the following:
1. Relying solely on your existing customers is inadequate. Later on, only to have half of them abandon you for some random reason.
2. Not investing in customer acquisition at all will give rise to the need for a new campaign. In turn, this can take time to generate results.
3. On top of that, it will also take time to build relationships with your new customers, time which you won’t have because your income has plummeted. Meanwhile, no new customers could fill the void of losing a loyal one.
4. There is no way to grow your business without expanding your customer base. Existing customers spend more money, but they have finite resources. Their expenditure will extend only to a certain point. If you want your business to expand, you need to grow your client list, while also focusing on retention.
Thus, to survive, a company should focus equally on customer acquisition and customer retention in their marketing strategies. It might not be necessary to allocate the same level of resources to both the areas, but you need to place the same level of importance to both. Customer loyalty serves as an added advantage.
In the digital age, all companies must face various challenges in acquiring new customers. There are a lot more options available to customers. How can you persuade a consumer to buy your product?
Here are some areas we focus on when it comes to building a customer acquisition strategy:
Content marketing is a critical weapon in every company’s marketing arsenal. The challenge is a lack of resources and time to produce the right type of content in a dynamic market. Businesses need two things—predictive data and content—to increase win rates by greater than 40%. Companies can also build the right data and content signals for customer acquisition within their existing sales and marketing technology.
Every company needs analytics. Often, businesses collect a great deal of data but do not know how to tell the right story. In customer-driven markets, service levels, customer experience and constant process innovation can be huge differentiators.
Many issues arise within the company. The team has to deal with these real challenges that they are likely to face. Continuous training and fostering transparency can help the team to face it.
Understanding the risks and determining to adjust across the entire supply chain can save millions of dollars. It also helps to ensure a more optimal customer experience.
The team needs to acquire the skill of real-time visibility across the entire product during the execution phase where they track every order across suppliers, i.e. Purchase order entry, pre-production and production, shipping, and delivery.. It helps the team to adapt to changes immediately. A well-informed team is more agile. They will be able to deal with challenges like natural disasters, tariffs, demand spikes or shortages and also prevail.
Real-time customer communication and feedback loops are essential. A customer success system will help drive real-time collaboration across your customer teams, measure customer experience and surface continuous feedback. If your teams can be proactive and identify potential problems before they escalate, they will foster greater trust and brand loyalty with customers.
The last area to focus on is social media. Depending on your business, social media engagement can be a powerful brand-building tool. The key here is to use the platform as a place where your customers and prospects can communicate.
Marketing has become way more technical and data-driven in the internet ecosystem. To realize its prominence, pushing down technical and quantitative aspects are necessary.
The third is that the scale and speed of growth are accelerating. The time from 0 to 1 million users in the B2C space has massively accelerated. Even the time in the B2B to go from 0 to 1 million ARR, has massively accelerated.
Growth is not about terminology or tactics. It’s about a change in our mentality, process, and team structure.
Focusing mainly on customer acquisition may help your business survive, but if you genuinely want to thrive, then you need to prioritize customer retention and loyalty. This is the real changing face of consumer acquisition.
We live in the era of the Experience Economy, as written by B Joseph Pine II and James H. Gilmore in an article published in 1998. The focus here is “on creating positive memorable experiences for customers”. The goal is to generate loyalty and increase retention rates. A lot of companies are ready to put a significant amount of their marketing budgets into customer acquisition.
A truly loyal customer is not someone who only does business with you repeatedly. It is someone who has an emotional connection with your brand. He wouldn’t switch to any other brand, regardless of the reason.
Customer loyalty isn’t the same thing as customer retention. A loyal customer would not switch to another company for any practical reasons, other than you going out of business.
An excellent example of a company that generates true loyalty is Apple. Many of their products, like the MacBook, are twice as costly as their Android or Windows-based counterparts, sometimes more, yet their customers would never switch, no matter what. They will provide a list of reasons – such as stability and quality. However, many of their customers haven’t even tried another product.
The emotional connection of the customers with this brand is clear. A loyalty which we see, transcending price, convenience and many other factors that would entice other customers to switch to a different brand.
To achieve similar results, therefore, it is imperative to build real loyalty in your customers that establishes an emotional connection which far outweighs other practical considerations. And yes, it is much more complicated nowadays, as consumers are more demanding and less loyal. Yet, it is possible to do, as Apple proves repeatedly.
Once upon a time, most businesses never thought of customer loyalty at all. They focused solely on customer acquisition or customer retention. After all, they were already customers, so why bother spending money on marketing to them and retaining them as customers? But the customer has changed, and so has the economy, which means businesses need to change too if they want to survive.
A business that wants to survive needs to place as much focus on retention as they do on an acquisition. And one that wishes to thrive must place similar importance on building real loyalty in their customers. Focusing on all these three aspects is the key to achieving tangible success in today’s market.