customer satisfaction

Choosing Customer Retention Over Customer Acquisition

In today’s marketplace, there are a variety of different avenues your business can take to prosper and grow. These strategies often come from a customer acquisition approach, where you are looking to gain new prospective customers. A big one that is often overlooked though is customer retention, where you are looking to keep your current customers loyal to your brand. This is a business strategy that you will find benefits you no matter what the economic landscape looks like, unlike customer acquisition that is only beneficial during times of high spending. This is an especially good strategy for new small businesses looking to grow into their vertical and obtain long-term success.   

The basis of utilizing customer retention is shown through the actions and efforts your business makes to help reduce the number of customers that defect. Customer loyalty is created from your first interaction with a customer to your last, the idea is to maximize their lifetime value while promoting growth for your business. Ok, so now you know what customer retention is and what it can do for you, but why is it so important? It’s quicker and seven times more affordable than customer acquisition, creating a lower cost than gaining new customers. It increases your average order value while creating brand promoters and bringing your business more profits. Customer acquisition can cost five times more than retaining an existing customer, according to Out Bond Engine, while increasing your customer retention by 5% can increase your profits by 25%-95%. Next is assessing where your brand currently sits within its customer retention.  

What is an acceptable customer retention rate? Getting hung up on the logistics of numbers isn’t the goal here, the only goal is growth. You can start by assessing your current strategy, identifying your areas of strength and weakness that will help you create a game plan. One of the best ways to assess your methods is to go to the source itself! Request and respond to your customer feedback, what this does is it creates an accessible line of communication with your consumers and allows their voices to be heard. Knowing how they feel and what they are thinking will help you boost their loyalty to your brand. Some successful strategies you can use to accomplish customer retention are to create loyalty programs, build trust in your brand, and receive customer feedback. The customer retention rate provides a higher ROI, return on investment, than customer acquisition will. So, before we talk about how you can utilize these customer retention strategies, we are going to go over how you can calculate your customer retention rate and churn rate.   


Customer retention rate = [(# of customers at the end of the time period – # of new customers gained in the time period) ÷ # of customers at the beginning of the time period] x 100   

Churn rate = (Lost Customers ÷ Total Customers at the Start of Time Period) x 100    


So, what does this mean? First, you are going to want to pick a period that you will use to calculate these rates. This can look like a month, a quarter, or even an entire year.  Now that you are aware of what your rates are along with your strengths and weaknesses, we can create a game plan to help you accomplish your short- and long-term goals. Let’s talk about a simple roadmap you can follow for this.  



  1. Schedule a consultation with Maryland Local Marketing to brainstorm technologically innovative and creative strategies for your brand   
  2. Let us then have our team evaluate your strengths and weaknesses in your vertical so we can create a proposal  
  3. We will make sure that these strategies help to promote your short- and long-term goals  
  4. We will help to advise you on best practices for your brand   
  5. By monitoring your analytics and progress we can assess what is working and what’s not so we can make efficient changes to your plan  

Did you know that if you are a client of USB Payment Processing you get a $500 marketing credit with Maryland Local Marketing? Why not take advantage today! Whether you decide to work on customer retention, you’re looking to explore customer acquisition, or you just want to elevate your brand; here at USB we have the resources to help your business flourish in multiple aspects. We will help you find the strategy that is right for you and your goals.