Customer Retention vs AcquisitionJanuary 24, 2018
Growing your ecommerce business requires putting resources into both customer acquisition and customer retention. However, it’s all too common to see companies that put too many of their eggs in the “acquisition” basket. According to consultants at Invesp, 44% of companies have a greater focus on customer acquisition vs. 18% that focus on retention. Unfortunately, that spread belies the great benefits that retention efforts can provide. Consider the following:
- Repeat customers who visit your site place orders at a rate of 4.5%, whereas the rate for new visitors is 2.4%
- After the 3-year mark, retained customers represent more than 60% of revenues for ecommerce companies
- Repeat customers are responsible for 40% of the total revenue of retailers in the United States
- It can cost 4-10 times more to acquire a new customer than it does to keep an existing one
Without a doubt, acquisition is important for the short-term growth of your business and for increasing the number of customers to eventually direct retention efforts toward. As the New Year approaches, now may be the perfect time to evaluate whether your company is striking the right balance.