Acquisition versus retention

The image below is a rather amusing yet fairly typical example of the importance most companies place on retaining customers. FusionBrand anecdotal research suggests that companies invest 85 – 95% of their marketing resources into the acquisition process and only 5 – 15% into the retention process. Can anyone explain why?

After all, according to Bain and Co, a firm has a 15% chance of selling to a new customer and a 50% chance of selling to an existing customer. Wouldn’t it make sense therefore to invest more in retaining customers than acquiring them? Furthermore, once a prospect becomes a customer, it is a lot easier to build a relationship with that customer, using content that is relevant and interesting to them, and not via the mass economy blitzkrieg popular with most advertising agencies.

Your thoughts?


2 thoughts on “Acquisition versus retention

  1. I totally agree with this and am making it a practice to send my favourite clients a gift basket for Christmas and/or any other special occasion. In my experience, this affliction is common not only with large multinational brands, but also with many small businesses.


    1. Hi David

      Thanks for the comment. A gift basket is a good start. I’d try to customise it to each clients interests – we have a client who is a government servant and receives loads of hampers every Raya. We wanted to stand out from the pack by giving something different (but without going over the RM250 limit for government servants). Because we have taken time to get to know him, we are aware that he is mad crazy about cars. So we went online and bought a bunch of accessories for him that aren’t available in Malaysia and put them in a basket and sent them over. He was so happy and goes out of his way to help us.

      Depending on the industry, there are a number of ways you can work with an existing customer to ensure a greater share of wallet. The key is to maintain communication after the sale, and this will require an investment in resources that may not have been identified early on.


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