Crack » Manage » Difference between customer acquisition and customer retention
Creative Commons Licence
Read time: 4 mins

Difference between customer acquisition and customer retention

Difference between customer acquisition and customer retention? It is easier to master than you may expect.

The concepts of customer acquisition and customer retention are commonly used with concerns to digital businesses like SaaS products sold online and e-commerce stores, but there’s nothing digital with them.

They apply to any business since ages, including hence the pre-digitalization brick&mortar stores. And this helps to get easier the difference between customer acquisition and customer retention even for who has just started with making business online.

What is intended for customer acquisition?

Customer acquisition is the entire process starting from getting your business exposed to people supposedly interested in what the business offers up to the time one of such people buys something.

So said, it should be clear that the concept applies to any business.

What happens is that if you think to a classic brick&mortar store, the customer acquisition process is pretty straightforward: you rent a store in the city area with the highest possible number of people passing by and eventually perform local marketing campaigns (e.g. flyers distribution).

When it comes to digital business, customer acquisition is a more complex process to be carefully implemented because it may lead to a big loss of money.

In fact, there are many strategies which could be implemented online to acquire customers, some focused on short-term results while others focused on mid-term results.

For example, you may produce regularly interesting content driven by keyword research in other to gain SERP positions. Or, you may strengthen your presence on social media and push on advertising campaigns.

Generally speaking, the bucket of tactics used to gain exposure to people considered interested into your business offer, along with tactics implemented to convert them into the first purchase (e.g. special welcome discount) make the so-called customer acquisition.

What is intended for customer retention?

Customer retention is the full set of actions you and your business put in place to transform the person who made the first purchase into a recurring customer, potentially a brand ambassador.

That’s all. As in any business since ages, the business owner aims to count on a group of loyal customers. The latter are the ones who allow you to plan a bit, even though they’re not foregone.

Let’s think about a brick&mortar shop for babies, you for sure have in your town. Customer retention for such a shop means being able to convince the people who get in and buy the first time to get back every month for the next years to buy for all their babies’ needs.

Why should this happen? There’s always a mix of reasons, from the trust people have in the sales assistant to the willingness of discovering new products every month, to mention the two probably more mainstream reasons.

What is the main difference, then?

To get finally to the point, the main difference between customer acquisition and customer retention is that the first point out to the process of getting new customers on board while the second refers to the activities to make people buy again and again from your business.

Simple as that.

The key point is that the economic effort employed by your business to acquire a new customer should be paid back by the customer himself, by repeatedly purchasing your products/services.

More on this key topic to build sustainable businesses can be found in my previous article about the cost of customer acquisition vs retention.