Stop me if you’ve heard this one before: “It costs X times more to acquire a customer than to keep one, so we should focus on retention.” You may even have said it yourself. However:

1. Acquisition drives growth
Research consistently shows that successful acquisition drives growth and poor acquisition causes decline, more so than retention.

2. You might be retaining unprofitable customers
Many brands don’t know which customers are profitable or loss-making so fight to keep them all, to their detriment.

3. Acquiring more customers gives you greater leverage
The less each customer contributes as a revenue percentage, the less bargaining power they have, while a larger customer base can also give you more negotiating power with suppliers. Both can improve profitability.

4. Newly acquired customers recommend you more
Research shows a neutral or negative association between recommendation rates and brand tenure so if we want word to spread, we want acquisition.

5. Acquisition costs vary, so average figures are irrelevant
Category maturity, switching costs, brand strength and many other factors affect acquisition costs. The only figures you should care about are your own, not arbitrary, attention-grabbing stats.

The true costs might not be what you think!

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