When you’re running a small business, every customer matters. But one of the biggest challenges many small business owners face is dividing time, budget, and energy between finding new customers and keeping existing ones happy. The long-term success of your business lies in striking a balance between customer acquisition and customer retention and building a marketing strategy that supports both.
Why You Need Both
- Customer Acquisition: Customer acquisition helps your business grow; you need to be bringing in new customers to your business at a steady and sustainable rate.
- Customer Retention: Customer retention helps to keep your business sustainable. It’s more cost-effective to retain a happy customer than to acquire a new one. This is because loyal customers are more likely to buy again and refer thier friends and family.
Focusing on both bringing in new customers and keeping the ones you already have is key to your marketing strategy. Here is how you can ensure you are focusing on both:
1. Understand Your Customer Journey
Before you can attract or retain customers, you need to understand the steps they take to find, buy from, and stay with your business. A good way to do this is by mapping out your customers’ journey: from first discovering your business, to making a purchase, and then to becoming a loyal customer and advocate.
Once you understand your customer journey, you can create marketing content tailored to each stage, whether that’s awareness (acquisition) or loyalty-building (retention).
2. Split Your Budget Wisely
As a small business owner, your budget may be limited, so carefully consider where you want to focus your spending.
- Allocate a portion of your marketing spend on lead generation activities: this may include things like social media ads, search engine optimisation (SEO), events and partnerships.
- Dedicate another portion to retention tools like email marketing, loyalty programmes, customer service improvements, or small “thank you” gestures.
A good rule of thumb is to put 60% of your budget on retention and 40% on acquisition.
3. Use Retention as a Growth Tool
Retention isn’t just about keeping customers; it can be part of your acquisition efforts as well. Happy customers leave reviews, refer friends, and share their experiences. You can encourage this by:
- Setting up referral programmes
- Asking for testimonials and reviews
- Featuring customer stories on your website or social media
Word of mouth remains one of the most powerful and cost-effective ways to acquire new customers.
4. Personalise Where Possible
Customers (both new and returning) expect more than one-size-fits-all marketing. Use the data you have, such as past purchases, preferences, or location, to personalise their experience with you. Consider things like:
- Sending tailored email offers
- Recommending products they may like
- Acknowledging birthdays or anniversaries
Personal touches can increase loyalty and help boost your conversion rates.
5. Measure What Matters
Finally, an important part of your marketing is to regularly review your results. Be clear on areas such as:
- How many new customers are you bringing in each month?
- What’s your customer retention rate?
- What’s the lifetime value of a customer?
Use these insights to adjust your strategy and ensure you’re investing wisely in your marketing campaigns.
Balancing customer acquisition and retention isn’t about choosing one over the other; it’s about recognising that both play important roles in your business growth. By investing in both areas and continuously refining your strategy, you’ll build a stronger, more sustainable brand that customers return to again and again.
If you would like to find out more about how you can create an effective and sustainable marketing strategy for your business, please don’t hesitate to get in touch with one of our friendly team at Ava Rose Marketing Oxfordshire.