Customer Acquisition vs. Customer Retention
Acquiring new customers and retaining them are the basic goals for any business, but it’s far too easy for companies to view them as competing objectives with no overlap. You can see this from the countless articles, surveys, and blog posts that have been written about whether acquisition or retention efforts are a better investment. For example, a simple Google search for “customer acquisition vs. customer retention” yields 450,000 results with arguments in favor of either which go something like, “retaining customers costs less than acquiring new,” or “without new customers, the company can’t grow.”
While the points presented in these articles make good arguments, companies that seek to choose whether acquisition or retention is a better investment are solving for the wrong problem. Ultimately, companies must perform both activities but strike the balance that maximizes customer lifetime value (LTV) through delivering a satisfying experience at all parts of the customer lifecycle.
Improving Customer Acquisition and Retention
As an industry leader in call center technology and business process outsourcing, Arise understands that a customer’s experience with a contact center is a key driver of their overall perception and engagement with a brand. Here are two goals that are integral to customer acquisition and retention. Follow these and no doubt you will see significant improvement in your customer LTVs.
Goal: Minimize Hold Times
- Why it’s Important to Customer Acquisition: If prospective customers are reaching out to purchase your product/service, you need to have staff ready and available to help. If customers “abandon” the conversation because they have to wait too long to speak to you, that’s a huge problem.
- Why it’s Important to Customer Retention: Existing customers have questions/problems/want to purchase again and they need service. If they can’t get what they need from your brand, they will go to your competitors.
- Solution: Find a solution that can flex to meet demand while minimizing costs
- Utilize a flexible on-demand platform adaptable to call volume changes.
- Don’t pay for time you are not using productively. Minimize costs by finding a solution that only charges for utilized time – time spent actively servicing your customers.
Goal: Maximize Quality
- Why it’s Important to Customer Acquisition: Higher quality call centers yield higher conversion rates. Customers are more inclined to buy from someone who is knowledgeable about a product who they trust.
- Why it’s Important to Customer Retention: Higher quality provides better first call resolution rates. It takes special skills to handle what can be very unhappy customers who reach out to a customer support or technical support contact center.
- Solution: Find a solution which leverages loyal brand advocates to serve your brand.