Customer Acquisition vs Retention

customer acquisition

Which is better, customer acquisition or customer retention? That is quite deceptive : both are essential for long-term growth and stability.

Mostly, businesses concentrate their resources and time working on acquisition. Efforts to enhance retention are frequently put on the back burner or completely ignored. In reality, for certain business models, retention offers a much higher ROI on advertising spend and is frequently much more cost-effective than its counterpart.

Which aspects of marketing should you prioritize? Let’s look into the specifics of customer acquisition and retention. 

What is meant by "customer acquisition"?


The process of convincing potential customers to buy your products is customer acquisition. A solid customer acquisition strategy generates leads, enriches them till they are prepared for sales, and converts them into customers.

Your customer acquisition cost is the total cost of these steps.

What is “customer retention”? retention

The capacity of an establishment to transmute their patrons into recurrent ones and avert them from shifting to a rival is identified as patron preservation. This indicates if the superiority of your commodities and amenities gratify your extant customers.

Additionally, it constitutes the mainstay of the majority of subscription-anchored ventures and amenity contributors.

Similarities between Customer Acquisition and Retention

While the acquisition of customers and their retention are dissimilar in nature, they share various commonalities in terms of their outcomes and requisites. They both emphasize the provision of a favorable customer experience and the generation of revenue for an enterprise.

Let us delve into the fundamental resemblances between these two concepts and their mutual demand for meticulous planning and considerable exertion on your part.

  • Customer Acquisition and Retention Drive Growth 

Customer acquisition and retention share a fundamental similarity, that is, both are vital to the growth and revenue of a business, primarily through customers.

A business cannot exist without customer acquisition, but it cannot be sustained without customer retention. The acquisition of customers serves to expand the customer base, bringing in new revenue and supporting business growth. On the other hand, retention serves to create stability and consistent sales, providing predictable revenue streams.

Customer acquisition and retention also contribute to the establishment and growth of a brand’s reputation. Acquisition strategies such as content marketing and advertising help to increase brand awareness, whereas retention’s focus on customer satisfaction creates a positive reputation through word of mouth and customer reviews.

  • Acquisition and Retention Each Require Strategic Planning

The correlation linking client attainment and preservation is that both demand robust approaches to be effective. Unless you have a comprehensive understanding of your target audience, neither of these methods will succeed.

Client attainment necessitates a meticulous plan to entice potential customers and ignite an interest in cold prospects. In order to accomplish this, you must conduct a thorough investigation into the market, grasp the essence of your unique selling point, and clearly articulate the dilemmas you address and the target demographic you cater to. All of these elements will contribute to your tactics for reaching out, such as content marketing and advertising.

  • Neither works in the absence of consistent branding

Customer acquisition works when businesses’ branding, values, and guarantees are able to resonate and connect with their target audiences. Similarly, businesses can only keep customers if they live up to the brand’s promises

If branding is inconsistent or customers believe they have been subjected to false advertising, it is a strong incentive for them to abandon a brand in favor of another. Having consistent, strong, and clear branding that extends beyond the checkout page is critical for acquiring new customers and retaining existing ones.

This is especially important when it comes to following through on any claims made about your brand or product. If you make a promise to attract customers and can’t back it up, you won’t keep them.

How Customer Acquisition and Retention are Different

  • Acquisition is more costly 

Customer acquisition and retention exhibit distinct statistical differences among industries, although studies demonstrate the latter to be relatively more economical. To wit, the cost of procuring a new customer surpasses that of preserving an extant one by almost quintuple.

When it comes to novel customers, one must bear in mind that the process starts from scratch. Such clients are unlikely to harbor any prior experience with the brand and may even exhibit skepticism towards the company. Gaining their interest in the product requires extensive investments of time and labor, and, moreover, it requires even more considerable amounts of temporal and financial resources to persuade them to make a purchase. Existing customers, on the other hand, require fewer resources to be convinced due to the fewer number of transactional obstacles.

  • The ROI on retention is higher

The expenses associated with acquiring customers in the early stages of business operations can cause many relationships between businesses and customers to become unprofitable. It may take several months or even years of solid retention practices before these relationships can generate significant returns. As demonstrated by a certain research, enhancing retention rates by 5% can result in a 95% surge in profitability.

In essence, a customer’s value grows over time, and a potent retention strategy enables you to maintain existing customers for an extended period.

Most businesses prefer customer acquisition, This is why:

Acquisition boosts vanity metrics

Customer procurement endeavors frequently yield astonishing figures: increased website visitors, heightened daily active users, and other similar metrics. These numerical outputs are easily touted as triumphant accomplishments by advertisers. However, these figures may just be superficially impressive, as they do not furnish any actionable revelations regarding future strategies. Such metrics are known as vanity metrics.

The outcomes of acquisition campaigns are more visible

Customer retention is a process of extended duration, the fruition of which may take several years to materialize. Conversely, acquisition campaigns offer expeditious and facile metrics of success. For instance, “new users” is a self-explanatory indicator that can be readily ascertained. In essence, many commercial entities treat customer acquisition campaigns as the marketing equivalent of “instant gratification,” without affording due consideration to whether they constitute the best employment of fiscal resources.

How Marketers Are Using Online Channels For Retention Or Acquisition

Online Marketing Channel
Both Equally

Paid search




Online display advertising




SEO (natural search)




Web retargeting




Mobile web




Mobile and web push notification




Social media marketing




Mobile apps








Mobile messaging









Focus on improving customer retention if you want to grow your business in 2023 and beyond. This might require some time, but you’ll generate a flywheel effect with Vispan Solutions, in which every new and existing customer adds more value and growth to your business over time.