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Acquisition VS Retention: why investing on loyalty is convenient for companies


“The devil you know is better than the devil you don’t” says the old proverb, and nowadays it sounds quite outdated, since we are accustomed to prefer new things over the old ones, aiming at progress and overcome, even when it comes to customers.

However, even in this proverb there is a grain of truth, which can be applied in very contemporary contexts. Turning devils into users, for example.

Abandoning old customers, who have already purchased and perhaps still have something to spend on your E-commerce, might be worse than endlessly chasing new ones.

Retaining the customer base is an activity that is still unfairly underestimated by many companies, which completely focus on the acquisition process.

Considering that old customers cost 7 times less than new ones,  isn’t it worth investing more in them?

The fact is that the two strategies – Acquisition and Retention – are both essential in the survival and healthy growth of a business, and should never be separated from each other.

From customer to recurring customer: all loyalty activities tend towards this transformation, to enhance the Lifetime Value of their users through the main communication channels (email marketing, social media, etc.).

In this way, even the cost of acquiring a new customer is optimized, since the Retention process begins with the company’s first contact with those who are potentially interested in buying and continues throughout the relationship.

Consistently following this path brings long-term benefits.

A satisfied customer who returns to buy is the best ally of every company: they will spread the word and help improve the brand in terms of reputation, an essential factor for its success.

On the contrary, underestimating and neglecting relationships with acquired customers in favor of pure Acquisition, tends to turn out as a vicious circle: we continue to chase after the acquisition of new customers, at increasingly higher costs, and previous, so laboriously “attracted”, customers are lost. 

Segment your customers to target and retain them

The first step in building loyalty with your customers is to understand them.

The RFM model is based on three variables (Recency, Frequency, Monetary) to segment and measure the value of every customer:

  • Recency: how much time has passed since the last order. The less, the better, considering that those who have just purchased on an E-commerce are more willing to make another one, compared to those who have not bought for a long time;
  • Frequency: How many orders did this customer make in a year? Customers who buy more frequently are more willing to buy again than those who have only placed one order;
  • Monetary: how much does a customer spend on average in a year? Quite intuitively, customers who normally spend a lot are more willing to buy again.

At this point it’s a matter of identifying the right message to convey to each customer cluster, using different levers to maximize the result.

Depending on the RFM factors we can identify these main segments:

  • New customer: who have recently made a purchase
  • Promising customer: who have already made two purchases
  • Loyal and VIP customers: who have made 3 or more purchases, including big ones
  • About to lose customer: customers who have not made purchases for some time
  • Lost customer: customers who have not made purchases for a long time

As a beginner, you can differentiate the content based on the old – new customer macro division: those who are about to buy will probably need positive reviews to guarantee the quality of the product or a discount to convince them, while those who have already purchased – and are already convinced – are inclined for benefits or dedicated content (such as a guide or a discount) on what they bought.


AI applied to Retention for a data-driven strategy

Being aware that bringing back those who are already customers has much lower costs and a greater chance of success than finding new ones, every company must find a way to actually do it.

ByTek, the Martech Company of the Datrix Group, provides marketing teams, especially in the E-commerce industry, with an effective platform that leverages loyalty, to build customer retention.

In this sense, today an increasingly accessible and agile technology, combined with the potential of AI, allows the company to integrate all the data of their customer base, to analyze and cluster them correctly, so as to activate more and more targeted actions, with personalized messages according to the “phase” of the customer’s life cycle.

Our Audience AI tool is based precisely on these premises: it collects all the information that you already have about your customers in a structured way, to activate them in a strategic perspective, keeping the systems already in use in the company.

Through precise and dynamic insights on the customers, this solution facilitates the development of tailor made marketing campaigns, thanks to a simple integration, in no-code and low-code mode, with CMS, CRM and marketing automation tools, but also with advertising and email marketing platforms.