Acquisition Marketing vs. Retention Marketing

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12 Jul

Acquisition Marketing vs. Retention Marketing


 Acquisition Marketing vs. Retention Marketing. 


Before we get started, let’s understand these two concepts. Put simply, acquisition marketing refers to gaining new customers. Retention marketing refers to engaging current customers to return and shop again.


Acquisition marketing, as necessary as it is, has a very low return on investment.  It costs 6 to 7 times more to acquire a new customer than retain an existing one (1).  On the other hand, retention marketing, which is largely ignored by small business, has an enormous return on investment. In addition, you are on average 10 times as likely to sell to an existing customer compared to a new prospect (2).


Most importantly, retention marketing centers around the lifetime value (LTV) of your customer. Focusing on customer lifetime value is critical to both the profitability and the long-term health of your business. Increasing customer retention rates by just 5% can increase profits by 25% to 95% (3).


So why do organizations spend so heavily on customer acquisition and not retention?


Unfortunately, retention marketing tools for small business are virtually non-existent. Can you name one company that offers retention marketing tools for small business? No? Can you name any companies that provide acquisition marketing? I'm sure you're familiar with TV, radio, Facebook, newspapers, Google, door hangers, magazines, billboards, local sponsorship's, direct mail, and many other outlets for acquisition marketing.


This exclusive reliance on customer acquisition can lead to continuous and expensive churn. Therefore, it is imperative to engage in retention marketing once a sale is made.  A retention marketing tool would be one that boosts customer loyalty, proactively reduces customer defection, allows direct customer communication, provides gamification to encourage engagement, and promotes customer goodwill.


Introducing Nlocation, a counter-top retention marketing device for small business satisfying all of the above requirements. Nlocation is affordable, simple to use, and mostly automated. Small business now has an effective tool to shift the unbalance of acquisition and retention.


(1). Bain & Co.-

(2). Forbes -

(3). Bain & Co. -