Dee Robbins 10 December 2019 2 min read

Is Customer Retention the New Acquisition?

In the last five years, the cost of acquiring new customers has increased by over 50%. SEO, SEM and sponsored social posts… Marketing is simply becoming more expensive.  In a growing business, expenses are often considered investments. Customer acquisition cost (CAC) is one such investment, and it’s where a lot of marketing dollars get spent… but is it the most rewarding? 

What is Customer Acquisition Cost? 

The cost of acquiring a customer (CAC) can be calculated by simply dividing all the money spent on acquiring more customers (usually marketing expenses) by the number of customers acquired in the period that money was spent.

Reducing the cost of customer acquisition and proving marketing ROI (return on investment) are two of the most commonly cited marketing priorities for companies.

But ROI really depends on what each new customer is worth to you. It’s not hard to see that the below scenario is far from ideal. If the cost to acquire customers exceeds their lifetime value (LTV), you’re fighting a losing battle.

Image of high CAC and low LTV tipping scales (



A shift in focus

So, let’s forget about new customers for a moment, and think about your current customers. Are you nurturing those relationships? Giving them a great experience every time?

Happy customers come back. Really happy customers tell their friends.

Whilst product, price, and speed are important, it’s not what most customers put at the very top of their priority list. What is far more valuable is the experience. 

‘Taxi’s weren’t disrupted by Uber. They were disrupted by a better customer experience.’ 


Invest in a great Customer Experience (CX)

Improving your customers’ journey can yield significant results for your business. You can increase revenue, reduce costs, gain higher loyalty and increased referrals. 

It can be hard to know where to begin with your CX strategy. Having an eCommerce platform provider who can support your efforts is critical. You'll need them to implement functionality to streamline the buying process  - for both you and your customer.

Some options to consider:

  1.  Do you offer online returns?   Online retailers experience 3 times as many returns as brick & mortar stores, and the processing of these returns is a costly overhead for most businesses. Having the ability to accept returns online allows both your business and your customer a pleasant, hassle-free experience.
  2. Do you provide your customer with confirmation of shipping and provide a consignment number so they can track online? 
  3. Have you considered how you package your goods?

There are plenty of ways you can invest in your Customer Experience. Start by asking yourself: ‘Are we spending too much on acquiring new customers when we could look closer to home, at our CX?’

Customer Retention really IS the new Acquisition.