Customer acquisition vs. customer retention - which is more worthwhile?

Stefano Viani

Management

27 May 2016 Digital Agency Consulting

In order to retain customers, you have to win them over in the first place. However, in times of saturated markets, this is neither easy nor cheap. A large variety of virtually interchangeable products allows online shoppers to be extremely selective. Bargain hunting on the web has become a popular sport, and not just with the advent of price comparison portals.

Kundenbindung vs. Kundenakquise – Blackbit digital CommerceMany online retailers continue to see winning new customers for their shop as their most important goal and invest a lot of money in acquisition accordingly. Once a purchase has been completed, they often say goodbye to their customers with the dispatch confirmation and leave them to the competition. We have summarised here why online retailers should focus on customer loyalty instead:

Why regular customers are so valuable:

  • More sales: while first-time buyers are mainly after bargains and special offers, satisfied existing customers spend more money in the long term.
  • Low price sensitivity: Trust and quality are more important to regular customers than price when making a purchase decision.
  • Valuable insights into purchasing behaviour: Long-standing customers can be better analysed and more accurately inspired with individually tailored offers.
  • Hardly any support required: While new customers often want to be taken by the hand and place greater demands on your company's sales and service department, existing customers are usually easy to look after and can find their way around the shop on their own.
  • Credible brand ambassadors: Satisfied customers are the most valuable brand ambassadors, as they pass on authentic recommendations to their personal environment and other interested parties. Without investing in additional advertising, you can gain new customers along the way.
  • Significantly lower costs: Less advertising expenditure, fewer complaints, less service effort - it's clear that you spend far less money on regular customers who are ready to buy than on new customers.

Conclusion:

The bottom line is that new customers cause significantly more costs than convinced regular customers - from advertising expenditure and personnel costs (sales, service and support) to complaint management expenses (shipping costs for complaints, etc.). As online retailers hardly know anything about the preferences of first-time buyers, they can be targeted less accurately than regular customers. At the same time, customers who are loyal to the company in the long term generate significantly more sales. Many good reasons to focus more on effective customer loyalty!

Checkliste Kundenbindung: Unsere 38 Experten-Tipps zum kostenlosen Download

How to effectively retain customers at your company: 38 expert tips to download

Customer loyalty pays off. But how do you gain satisfied regular customers who will ideally continue to advertise for your shop? We have put together 38 useful tips that will turn you into a customer loyalty pro in no time at all. Use the free checklist to find out how you can perfectly align your communication, service, special promotions and shop design to generate regular customers.

About the Author

As Executive Director of Blackbit digital Commerce GmbH, Stefano Viani manages all areas of the agency in the offices in Göttingen, Hamburg, Berlin and Kiev. His passion is the development of marketing strategies and their implementation in concrete measures.

In his free time, Stefano is passionate about riding his motorbike or working out in the gym.